The instrument of choice for planning an artist's estate is the art foundation under foundation law. The art foundation ensures that the artistic estate is planned, secured and held together with sensitivity and at the same time made available to future generations in accordance with the artist's personal wishes.
The instrument of foundation law guarantees the individual organisation and legally clear protection of artists' estates for artists, their heirs and cooperating gallery owners when the oeuvre is transferred to an art foundation.
A closer look at foundations under foundation law
It is worthwhile for artists and their heirs or those dealing with the estate, as well as for gallery owners, to familiarise themselves with foundation law. This is because foundation law enables the founder to dedicate his assets to a specific foundation purpose (Amendments to the articles of association).
Years of creative and creative activity that bear priceless fruit and produce many works of art and creations should be honoured with appropriate estate planning (Art and estate planing).
There are different types of foundations under foundation law, such as the independent foundation with legal capacity under civil law. After being recognised by the state, this foundation itself holds the donated assets and is represented by its board of directors or managing director (see §80 of the German Civil Code, BGB).
It is also possible to organise the foundation as a dependent trust foundation, which is managed by another institution. As a minimum capital is not required, unlike with an independent foundation, this is a regular option for private art foundations.
Foundation law also offers the possibility of an endowment to the assets of an existing foundation.
Which type of foundation under foundation law makes sense depends on the purpose of the foundation and the desired structure. Experts in foundation law should be consulted who are aware of the importance of the work as cultural heritage and who are serious about taking the interests of artists into account.
For example, it may be advantageous to organise the foundation in such a way that licensing and reproduction rights are held by the foundation. Products from this can be used to finance the foundation's work.
Special features of foundation law: Art foundation
The special feature of foundation law is that the founder can specifically and individually determine the purpose of the art foundation during his lifetime or upon his death. In contrast to other assets, the special nature of art as a communication channel for the emotional expression of the artist can be taken into account.
For example, the artist can make precise specifications as to which of his works are to be conserved and cared for in which way, but also exhibited, published or otherwise made accessible to the public.
Foundation law can also be used to plan measures to appeal to a new creative generation. To this end, projects can be set up to support, for example, scholarship holders and budding artists, who can then work on their own artistic identity.
In this way, foundation law offers individualisation and design options to reflect the artistic work and the artistic personality with sensitivity.
Foundation law requirements regarding the establishment of foundations
The establishment of a dependent foundation under foundation law is a contract between the founder and the foundation holder. It is based on the model of an independent foundation, also with regard to tax privileges.
However, such trust foundations are not subject to supervision by the foundation authorities and there is no state recognition procedure (see §80 (2) sentence 1 BGB). This means that there is plenty of scope for adapting and individualising the agreement.
With the help of the articles of association, assets can be dedicated to a specific purpose in an uncomplicated manner. The permanent and sustainable fulfilment of the foundation's purpose should be ensured with the help of the free funds initially contributed and the funds to be generated.
In the case of an art foundation, it is necessary to determine what funds are required in the long term for maintenance, appropriate storage and conservation on the one hand and for exhibition or documentation purposes on the other. Possible income or donations should also be taken into account.
The founder transfers the assets dedicated to the purpose of the foundation. It should be noted that in foundation law the assets should be specifically designated and stated as precisely as possible. The founder should endeavour as far as possible to specifically name the respective art and cultural assets, funds and other items to be donated in the foundation deed.
Real estate can also be donated. If, for example, the works are to be exhibited in a specially constructed and designed building, a property can be contributed to the foundation and dedicated to the purpose of the exhibition.
The art foundation should be in a position to maintain a comprehensive, accurate and detailed catalogue raisonné of the artist's works. This simplifies the appropriate administration of the artist's estate.
It is therefore in the artist's interest to organise the works of art to be donated during his or her lifetime. For this purpose, it makes sense to label the individual works with information such as the year of creation, the name, a description, the dimensions and the catalogue raisonné number. The fair market value should also be stated.
Setting up a foundation under foundation law therefore requires planning during your lifetime. However, like no other instrument, the art foundation is able to preserve the integrity of the artworks in their entirety and as stand-alone works and to utilise individual scope for design.
When setting up a foundation, the expertise of foundation lawyers should be sought who are aware of the emotional particularity and importance of the organisation of artists' estates and who can provide support and advice during the planning process.
Further planning and design options for the artist
Foundation law enables artists to continue to make their oeuvre particularly effective beyond their lifetime and to make it available to the cultural and artistic landscape in the individual way they wish.
Art collectors can also use a foundation under foundation law to plan the way in which their art collection, which has been lovingly curated and cared for over many years, should be made available to posterity.
If, for example, a work of art is to be donated to a museum and it does not fit into the collection from a curatorial point of view or the institution does not have the capacity to accept it, foundation law offers the possibility of making the work available to the public in another way or avoiding these inconveniences from the outset.
If there is co-operation between artists and gallery owners during their lifetime, foundation law offers advantages for gallery owners. For example, foundation law provides the option of agreeing that gallery owners can become part of the artist's foundation board after death and thus continue their work. This makes sense, as gallery owners often have years of experience of the artist's work and working methods and their judgement makes practical sense.
Family members, art historians or curators can also be involved in the planning.
With the instrument of the art foundation, foundation law thus offers a very high degree of self-determination and flexibility for artists, heirs and co-operation partners such as gallery owners. By defining a specific purpose for the foundation, long-term planning of the artistic estate is possible, which can be customised to the artist's ideas with the help of a wide range of design options.
Public and private partnerships can also be created with the help of foundation law. In this way, new ideas and ways can be created to exhibit the art, for example, and thus present it to the public in an appropriate manner.
Cohesion of the oeuvre
The establishment of an art foundation under foundation law also has the particular advantage that an artist's collection can be kept together.
Often, when an inheritance occurs and no estate planning has taken place, this can result in the fragmentation of an artist's works or a collection. This is because the works of art fall into the hands of different heirs who, for example, do not have a clear idea of how the artistic estate can continue to be recognised.
This is where foundation law can help, as the purpose of the foundation can be used to make binding stipulations regarding the fate of the estate as a whole.
The cohesion of an artist's entire oeuvre, which can include not only complete works of art but also notes, sketches and experiments, has far-reaching cultural significance. This is because having an overview of the entire work can encourage the viewer's own creativity and emphasise its embedding in and significance for the art scene.
Foundation law thus offers the option of safeguarding the entire work for future generations and, not least, its cultural significance. The cohesion of the entire oeuvre enables the artist to tell the story of his work and keep it alive.
Tax advantages of an art foundation under foundation law
Foundation law also offers tax advantages. In principle, foundations are subject to tax liability. Property acquisition and capital transfer taxes must be paid. However, foundation law can lead to tax privileges when art is transferred to a charitable foundation, meaning that these taxes do not have to be paid.
The art can then be transferred tax-free and the foundation can also benefit from tax privileges in the ongoing operation of the foundation. The tax savings can in turn be channelled into the care and conservation of the works or the promotion of cultural projects that are close to the artist's heart.
The prerequisite for this is that the activities of the art foundation are ‘aimed at promoting the general public in material, spiritual or moral terms’ in accordance with §52 (1) of the German Fiscal Code (AO). This means that it is a non-profit organisation.
For foundation law, it is recognised in accordance with §52 (1) number 5 AO that the promotion of art and culture is to be regarded as ‘promoting the general public’ and is therefore a charitable purpose. Insofar as relevance to art history can be demonstrated, the processing and preservation of the oeuvre constitutes a charitable purpose.
Well-known art foundations
More and more well-known artists, both nationally and internationally, have taken advantage of the special features of foundation law to inspire new generations.
„But what's really exciting is the robust, long-term increase in both grantmaking and the operation of cultural and educational programmes - archives and study centres, exhibition programmes, artist residencies, etc.“ Says Christine J. Vincent, the author of the report entitled „The Artist as Philanthropist: Strengthening the Next Generation of Artist-Endowed Foundations“.
In Germany, for example, Peter Jacobi, artist and sculptor, established the „Peter Jacobi Stiftung Kunst & Design“ foundation in 2018. Its main aim is to support young artists and designers and award an annual scholarship.
Leiko Ikemura, Japanese-Swiss painter, graphic artist and sculptor and internationally renowned artist, founded the non-independent Ikemura Foundation with her husband, architect Philipp von Matt, in 2017. It contains a representative selection of works and remains open to further donations by Ikemura.
Other well-known foundations include the Andy Warhol foundation (The Andy Warhol Foundation for the Visual Arts), Picasso foundation (Fundación Picasso), Helen Frankenthaler foundation (Helen Frankenthaler Foundation), Robert Mapplethorpe foundation (Robert Mapplethorpe Foundation) and Jackson Pollock foundation (Pollock-Krasner Foundation).
Résumé
The establishment of an art foundation within the framework of foundation law offers an excellent opportunity for artists, heirs, collectors and gallery owners to secure their artistic legacy in perpetuity and to organise it according to their personal interests. An individually defined foundation charter can actively shape the future of the artistic work, strengthen cultural participation and initiate various funding projects.
„With the art foundation, foundation law offers an extraordinary instrument for succession planning with a personalised configuration. The art foundation can be customised and reflect the artist's life's work according to their personal ideas. In this way, the artist's entire oeuvre can be made permanently available to society as a cultural legacy.“ Says dtb-partner, art historian and expert in foundation law and non-profit law Bertold Schmidt-Thomé.
Status 26.03.2025