Your client might be the next Vivian Maier or her next door neighbor.
Lawyers who are conscious of their clients’ needs and desires may reflect—alone and in consultation with each client—on the client’s views as to how she wants to be remembered. For many, this can take the form of gathering photographs to display at an eventual (but certain to take place) wake or memorial service and self-curating their image by managing how they’ve appeared through the years. For clients who’ve been involved in the creative process, for example, writing, art (drawings, paintings or sculpture), photography, music (compositions or recordings), this type of planning takes on even more importance. Those who’ve had economically productive lives in this arena, such as published authors, scholars, artists and the like, are accustomed to keeping track of their work.1 But, what about those clients who may have hidden treasures? The wise practitioner should inquire if the typical client has anything in these categories that she might want to identify and fortify for the time after she departs this mortal coil. Consider the value to your clients of starting the quest for their creative nuggets right now. That way, you can use revocable trusts to help these clients control what will happen to their work after they die.
Revocable Inter Vivos Trusts
Living trusts offer benefits to clients who may not otherwise consider themselves to be in the market for any estate planning. Although trusts are proven estate-planning vehicles for the control and transfer of property, the word “trust” may be off-putting to some. In fact, the cost of administering a living trust may be less than administering the same assets in a decedent’s estate. Further, less formality is required in the execution of a trust than a will.2 Trusts can provide a particularly effective instrument to transfer an artist’s or author’s work because they afford a mechanism for centralized control and management and prevent fractionalization of ownership. If the artist’s creative work is marketable, it may be important to feed pieces into the market over a period of time to avoid depressing the value. If an artist’s work is posthumously discovered en masse, reception into the art world may take time and a trustee’s guidance.
Case 1: Vivian Maier
In life, Vivian Maier was a nanny and a housekeeper, by all accounts an eccentric and private woman, unknown by the art world. She was also a brilliant street photographer. Her tableaux of the poor rival the poignancy of Dorthea Lange’s Migrant Mother, while other works are warm and playful. Chicago natives might appreciate her elevation of the familiar through her use of light.
Vivian died with no family. Although she had money troubles throughout her life, she hoarded 100,000 rolls of her undeveloped film, which she carried with her, seeking storage in spaces her employers could spare as she trailed a nomadic existence across the North Shore of Chicago. At some point, the nanny jobs stopped. According to the film portrayal of her story, Vivian’s hoarding instincts and eccentricities compounded with the aging process, such that she may have been unable to provide for herself in her later years.3 Fortunately, two of the boys for whom Vivian had once nannied financed her modest apartment and a storage locker.
Were it not for this kindness, Vivian’s negatives wouldn’t have survived. But, at the time of her death, her benefactors weren’t aware that Vivian’s personal effects had any potential value, let alone the makings of artistic genius. The film was boxed alongside worn clothing and randomly squirreled receipts and castoffs. Her belongings were sold in bulk at an auction house for $380 to aspiring history buff John Maloof.
John appreciated the potential value of the work he’d acquired. He devoted himself to chronicling Vivian’s life, as well as her photography, and noted the strongest marker of Vivian’s intention may have been a letter that she’d written to a printer in the small French town where her mother was born. Vivian expressed that the photographs she’d taken in America weren’t “too bad,” and she wanted them printed with a non-gloss finish. The randomness of John’s control over Vivian’s legacy wasn’t lost on him, nor on the acquaintances of Vivian’s he’d interviewed. They speculated as to whether she would have approved of the public disclosure and opined that Vivian certainly could have used the money herself that was to come from John printing the work and gallery showings in London, Germany and Denmark.
Individuals who’d considered themselves Vivian’s friends expressed that they would have liked to have helped her. She’d been desperate and struggled with mental illness and hoarding. It must have been “galling,” one ex-employer expressed, for someone so creative to have that talent unknown, scrubbing down others’ floors.4
Trust recommendation for Vivian: Future asset management as a will substitute. A revocable trust may serve as a vehicle for providing competent management for a settlor’s property at a future date when the settlor is unavailable, incapable or unwilling to manage the assets personally.
• Housing artwork in a trust allows for comprehensive management. Include provisions to allow the trustee to delegate tasks to specialist advisors who can make the necessary arrangements for matters such as display or exhibition of artwork, as well as insurance and storage.
• A revocable trust may provide future management without holding any significant current assets by functioning as a will substitute.
• The most important issue in the use of a revocable trust as a will substitute (aside from general trust issues involving assessment of the abilities of the beneficiaries and trustees) is the trust’s eligibility to receive pour overs from the settlor’s estate under the settlor’s will, from the estate of someone else under her will and from other trusts.
• In Illinois, there’s an additional consideration for pour-over gifts from a will to the revocable trust. For a pour over to be valid, the trust must be in existence when the testator’s will is made and must be identified in the testator’s will.5
• In Illinois, a trust instrument that doesn’t expressly or impliedly reserve to the settlor the power to modify or revoke creates a trust that can’t be modified or revoked.6 An additional benefit Vivian herself may have appreciated is that trusts can preserve the artist’s privacy. Singer Aretha Franklin recently passed away intestate. As a result, her personal finances may be made public, whereas, if she’d created a revocable trust for her estate, she could have kept her finances private and avoided the probate process.
Case 2: Mame LaCroix
When Alice befriended her reclusive elderly neighbor, watercolor artist Mame LaCroix, she learned many things about her that few others knew: Mame had a cherished poodle, Clara Bow Wow, named after her favorite childhood star; Mame had the same birthday as the railroad mogul whose fortune she had inherited; and Mame was a prolific watercolor artist. Slowly, Alice also learned Mame had fallen into a state of severe cognitive decline. In a busy and affluent suburb, inside a spacious but deteriorating North Shore Chicago home that had once been grand, Mame likely had warning signs that she was no longer able to care for her basic needs. Eventually, Alice noticed that Mame hadn’t been out walking with Clara Bow Wow for weeks.
Alice brought fresh flowers by, and then muffins, which Mame accepted on the landing. On her third visit, Alice pushed her way inside. The remains of Clara Bow Wow were in a dingy white pile on the hard wood floor and had been there for some time. Mame hadn’t asked for help, even though her house no longer had electricity or refrigeration and was swallowing her in its decay.
Alice helped Mame relocate into a supervised community. Alice had always thought that her friend’s watercolor paintings were beautiful, and so she kept them for herself. Unfortunately, Alice’s marriage with her husband ended poorly. Mame’s paintings became one more of the assets contested in the divorce between Alice and her husband.
Trust recommendation for Mame: Standby revocable trust.
• It may be advisable for elderly individuals, or those already suffering from the early stages of incapacitating diseases, to create revocable trusts to manage their assets on ultimate incapacity. A standby trust (that is, a revocable trust created during the settlor’s lifetime that allows the settlor to act as the trustee when able and to designate a co-trustee or successor trustee to assume managerial responsibilities when necessary) can be superior to durable powers of attorney or actual guardianships (or conservatorships), because the trustee has the authority to do more with the settlor’s property. Depending on the situation, a durable power of attorney may be necessary as well. Still, the standby revocable trust is usually less expensive than a guardianship because it doesn’t require frequent formal accountings or court approval.
• Here, a well-drafted standby trust could have allowed Mame to insulate the watercolors from the unknown predatory claims of Alice’s future ex-husband. If Mame had created a standby trust for the artwork and appointed Alice as her successor trustee, the instrument could have provided for Alice to assume control over the management of the artwork and become its sole beneficiary.
• Existing artwork, whose value is likely to maintain or increase, is commonly held as part of the assets of a trust with well-established art collections for enjoyment by future generations of the family.
• Trusts provide a compelling vehicle for future artistic works to facilitate the management of the release of the artwork, as well as to honor the settlor’s wishes as to the artwork’s display. The settlor should give clear instructions as to her wishes regarding whether the artwork can or should be sold in the future (if so, at what time and in what price range) or preserved for the enjoyment of the family.
• The trust instrument can be tailored to offer the settlor greater involvement in the succession planning process and can prescribe arrangements for the management of the particular categories of artworks settled in the trust.
• The trustee and its advisors should prepare and execute all necessary documentation to give effect to the change in ownership of the artwork (from transferor to trustee) and ensure that suitable insurance has been obtained from a specialist insurer effective from the date of transfer.7
Case 3: Jean Fritz
Fifty years after the “Chicago Seven” trial, writer Jean Fritz’s dimestore notebooks chronicling the four and a half months she served her civic duty as a juror are invaluable to historians and to our collective memory. Somewhat ironically, at 99 years old, Jean suffered from dementia. Her daughter suggested they sort through Jean’s basement together to surreptitiously uncover the journals that would again stir Chicago’s consciousness of the events from 1969 to 1970 that landed Jean on the front page of the Chicago Tribune.8
In those journals, Jean had recorded in exacting detail her impressions on the events at trial, and in so doing, she became the accidental voice for her generation. A bouffant-wearing suburbanite, she was also determined to chronicle events that were larger than herself. Following her jury service, she vocally challenged the judge’s verdict and helped to garner the defendants an appeal.
Jean is now deceased. By every measure, her role as a juror in the “Chicago Seven” trial altered the course of her life. But, she never published her journals. Neither did her family. One can easily imagine being put off by the transaction costs of doing so during her lifetime, as Jean had faced death threats for the stance that many in her social set found distasteful. Nor was she someone who sought out the spotlight, but rather found it thrust on her.
Objectively, her journals have value. They’re currently on display at the Edgewater Historical Society in an exhibit, “The Chicago Conspiracy Trial: One Juror’s Ordeal.”9
Trust recommendation for Jean: Standby revocable trust.
• Here, a standby revocable trust may have been desirable for Jean in her earlier years, especially after receiving her diagnosis of dementia, when her health started to decline.
• Timing is a worthwhile consideration. Apart from the question of whether a revocable trust would be advantageous is the somewhat thorny question of when is the right time to set it up. A firm decision should be made as to the exact time, or the event, such as a serious illness, that will bring the trust into existence.
• With a standby trust, the settlor may act as a trustee while able. A self-trusteed declaration of trust makes the settlor trustee and beneficiary, with exclusive enjoyment and control until incompetence or death. The instrument can be structured to ensure a seamless change of administration when the need arises for a successor trustee to take over.
• Practitioners should advise clients that there must be a method for determining when succession of the trustee will occur. This is necessary because the settlor may not recognize the need to relinquish control, due to diminished capacity. A common procedure is for the settlor’s adult child or spouse to make the determination.
• Jean could have specified trustees and alternate trustees and descriptions of the property to be included. The assessment of which property is to be included might change over time.
• Someone in Jean’s position, who isn’t sure how the family will react to the trust item, might use the living trust to see how its beneficiaries react to any benefits. If the reaction is good, the benefits can be increased or maintained.
• Conversely, if the reaction was bad, Jean could have revoked the trust property and elected a new beneficiary. For example, Jean could have opted to leave her journals to a charity—even its current home at the Edgewater Historical Society.
Benefits of Standby Trusts
Standby trusts allow for flexibility in the terms of powers and discretion that may be created. For clients of limited means like Vivian, a trust might provide a will substitute. For wealthy clients, such as Mame, a standby trust might be advised in addition to a will. In such a case, the trust instrument might provide for a specific class of assets, such as the watercolors, to ensure Mame control over her art in the future, by appointing like-minded Alice as her successor trustee. The durability of Mame’s trust could have protected the artwork from Alice’s husband’s attempt to get the property in the divorce. In all three examples, trusts offer protection against incapacity and allow for clear management of the art. Moreover, individuals who require professional assistance needn’t relinquish control of their property. Make it a habit to talk to your client about revocable trusts. Ask whether she has original artwork, an unpublished manuscript or a collection of travel photos compiled over a lifetime of vacations in exotic locations. Treating this property as a trust asset can help to preserve her wishes and may even create an artistic legacy.
—The author would like to acknowledge Stacey E. Petrek, an associate in the Chicago office of Dentons US LLP, for her invaluable contributions to the research and shaping of the article.
Endnotes
1. Famous names associated with such ownership vehicles include John Steinbeck, www.estatetrustlawyer.com/blog/steinbeck-heirs-fight-over-copyright-ownership/, Pablo Picasso, www.vanityfair.com/culture/2016/03/picasso-multi-billion-dollar-empire-battle and Marilyn Monroe, www.npr.org/2012/08/03/157483945/monroes-legacy-is-making-fortune-but-for-whom.
2. Former judge of the U.S. Appeals Court for the Eighth Circuit, Robert Hunter, cautions mistakes in trust drafting can cause steep penalties for clients. Judge Hunter advises practitioners to refer to trust forms that have stood the test of time. See Section 220:2. Sources of trust forms, 19 Ill. Prac., Estate Planning & Admin. Section 220:2 (4th ed.) (also recommending West Group and the Illinois Institute for Continuing Legal Education for trust forms).
3. Finding Vivian Maier (Ravine Pictures 2013).
4. Interview by John Maloof with Carole Pohn, Vivian Maier’s ex-employer, in Finding Vivian Maier, at 21:45.
5. 755 ILCS 5/4-4.
6. Mortimer v. Mortimer, 6 Ill. App.3d 217 (1972).
7. The first two “case stories” are mash-ups of true facts and fiction; the third one is directly connected to real life, reported in part at the time of the core events and in part more recently, looking back. (Then: www.nytimes.com/1970/02/20/archives/chicago-7-jurors-tell-of-compromise.html; Now: www.chicagotribune.com/news/columnists/schmich/ct-met-chicago-7-democratic-national-convention-mary-schmich-20180815-story.html).
8. The trial itself is a subject worthy of further study. Eight activists were charged with conspiring to incite the riots that erupted during the 1968 Democratic National Convention in Chicago (one of whom was severed when he wasn’t permitted to represent himself, bound and gagged in the courtroom and ultimately never retried). Other scholars have commented that the trial itself came to symbolize the widening gap between the generations cleaved by the war in Vietnam.
9. Seewww.edgewaterhistory.org/ehs/content/chicago-conspiracy-trial-one-jurors-ordeal.