Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 188

Careless estate planning: how artists can lose their legal voice

When a famous person dies, particularly if they were involved in producing art of any type, the legal implications are like any death, but on steroids (or stronger). Soon after George Michael was found dead on Christmas Day 2016, different players involved in his affairs clashed. A boyfriend allegedly released some of his music on the internet.

After a musician or actor dies there is often huge demand for their work. It is estimated that the value of George Michael’s estate increased by 10% or more than $10 million after his death. Whether copyright material is released to satisfy sentimental demand or financial motives, there are winners and losers financially. This creates conflict. While the conflict is in the public eye it increases the tension, but we suggest that this conflict is there even if the person is not famous.

Enforceability of legal contracts

When someone dies, they obviously can no longer enter into legal contracts. Contracts executed by them prior to their death or pursuant to appropriate agency agreements, if properly drafted, can bind their legal estate. In order to cash in on the commercial opportunity of artistic deaths, it is important that a trusted person is able to bind the estate. That person is usually the person the appropriate court declares is their lawful executor or administrator. The word ‘lawful’ is key here because there can be competing applications to be the deceased’s legal personal representative.

There may be allegations that the person was not of sound mind when they named an executor in a will or that such an appointment was later revoked or that the person is disqualified from acting in that capacity. If the deceased does not have a will, in NSW the person with the largest interest in an estate will usually be their legal personal representative. This means that the dispute comes down to who was the deceased’s de facto spouse or which brother or sister first makes an application to the court.

There is often a perception that being the legal personal representative gives a person an advantage. It is certainly true that they can deal with the deceased’s assets but they may also have to account for same.

Sort it out in a valid will

All of this would be simpler if the deceased named people who they wanted to be their executor, and who agreed to play that role, in a valid will. David Bowie apparently named his business manager and his lawyer as his executors. However, it is understood that his lawyer has renounced so will not be the executor. We can only guess at whether this is to manage a conflict of interest.

In our experience, clients select their executor carefully to ensure that the people who step into their vacated shoes are able to work well together and are disappointed if one of those people decides not to act. It may be that the ‘check and balance’ in that case is no longer present if there is only one executor. How sure are you that you have got the combination of executors who will act for you?

Some professionals charge large fees for acting as executor. It is reported that Michael Hutchence’s estate’s legal fees were more than $670,000, leaving an insubstantial amount for the beneficiaries.

Usually, being an executor of an estate in which you are not a beneficiary is a thankless task. We currently act for two executors for a deceased alcoholic. One of their motives for acting is that the residuary beneficiary of the estate is a charity which they support. They have had to organise a funeral, pay for it (so they are owed money) and sign countless forms and submit certified copies of identification documents to banks and super funds.

The cases can be even more complicated if there are tangible and intangible assets such as copyright and contractual rights. Closer to home, Max Dupain’s Sunbaker photograph was caught up in a 1992 dispute about the distribution of his photographs and negatives between his widow and his collaborator.

Properly representing the deceased

A risk for an artist is that their executor will collude with the beneficiaries to deal with their art in a way that is contrary to the wishes of the deceased. If there is no-one acting as the conscience of the deceased, who will have a right to call ‘foul’?

The solution in many cases may be to have a ‘literary executor’ who has clear authority, for an agreed fee, to manage commercial and artistic matters for the deceased. Pending a grant of representation, this person could issue strong warnings to those misusing the deceased’s copyright and, on becoming the legal personal representative, call in the assets of the estate and manage the estate for the benefit of all of the beneficiaries. The literary executor can be answerable to third parties with the result that the wishes of the deceased, their public and their beneficiaries are best managed.

 

Donal Griffin is a Principal of Legacy Law, a legal firm specialising in protecting family assets. This article is educational and not personal advice, and does not consider any individual circumstances.


 

Leave a Comment:

     

RELATED ARTICLES

Seven steps to easier management of your estate

Talk to your family about ageing and your will

Seven items your estate plan may have left out

banner

Most viewed in recent weeks

Super changes, the Budget and 2021 versus 2022

Josh Frydenberg's third budget contained changes to superannuation and other rules but their effective date is expected to be 1 July 2022. Take care not to confuse them with changes due on 1 July 2021.

Noel's share winners and loser plus budget reality check

Among the share success stories is a poor personal experience as Telstra's service needs improving. Plus why the new budget announcements on downsizing and buying a home don't deserve the super hype.

Grantham interview on the coming day of reckoning

Jeremy Grantham has seen it all before, with bubbles every 15 years or so. The higher you go, the longer and greater the fall. You can have a high-priced asset or a high-yielding asset, but not both at the same time.

Whoyagonnacall? 10 unspoken risks buying off-the-plan

All new apartment buildings have defects, and inexperienced owners assume someone else will fix them. But developers and builders will not volunteer to spend time and money unless someone fights them. Part 1

Buffett says stock picking is too hard for most investors

Warren Buffett explained why he believes most investors should not pick stocks but simply own an S&P 500 index fund. "There's a lot more to picking stocks than figuring out what’s going to be a wonderful industry."

Should investors brace for uncomfortably high inflation?

The global recession came quickly and deeply but it has given way to a strong rebound. What are the lessons for investors, how should a portfolio change and what role will inflation play?

Latest Updates

Exchange traded products

ETFs are the Marvel of listed galaxies, even with star WAR

Until 2018, LICs and LITs dominated ETFs, much like the Star Wars franchise was the most lucrative in the world until Marvel came along. Now ETFs are double their rivals, just as Marvel conquered Star Wars.

Shares

Four leading tech stocks now look cheap

There are few opportunities to buy tech heavyweights at attractive prices. In Morningstar’s view, four global leaders are trading at decent discounts to their fair values, indicating potential for upside.

Shares

Why copper prices are at all-time highs

Known as Dr Copper for the uncanny way its price anticipates future economic activity, copper has hit all-time highs. What are the forces at play and strategies to benefit from the electric metal’s strength?

Economy

Baby bust: will infertility shape Australia's future?

In 1961, Australian women had 3.5 children on average but by 2018, this figure stood at just 1.7. Falling fertility creates a shift in demographics and the ratio of retirees to working-age people.

SMSF strategies

The Ultimate SMSF EOFY Checklist 2021

The end of FY2021 means rules and regulations to check for members of public super funds and SMSFs. Take advantage of opportunities but also avoid a knock on the door. Here are 25 items to check.

Economy

How long will the bad inflation news last?

The answer to whether the US inflation increase will prove temporary or permanent depends on the rates of growth of the quantity of money. It needs to be brought down to about 0.3% a month, and that's a problem.

Economy

The ‘cosmic’ forces leading the US to Modern Monetary Theory

If the world’s largest economy adopted a true MMT framework, the investment implications would be enormous. Economic growth would be materially greater but inflation and interest rates would also be much higher.

Sponsors

Alliances

© 2021 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.