The Power of Storytelling in Multigenerational Art Collecting


Experts from PURE Insurance, Christie’s, and UBS Private Wealth Management on possible pitfalls of art collecting, good custodianship, and the importance of legacy planning.

“La montagne Sainte-Victoire” by Paul Cezanne, part of Paul Allen’s collection that was auction by Christie’s. (Anadolu Agency | Getty Images)

If you have any doubts that the art market is thriving, Christie’s November 2022 auction of Microsoft co-founder Paul Allen’s collection should put them to rest. The charity sale surged past the previous auction record of $922 million to hit $1.5 billion, an emphatic punctuation to end an exceptionally strong year.

The market continues to be active in 2023, as evidenced by the performance of recent auctions including that of fashion icon and former Vogue editor André Leon Talley’s collection, which netted more than double the high end of pre-sale estimates.

At this level of collecting, buying a piece of art isn’t a simple transaction—purchasing a Georges Seurat painting for $149 million, as one bidder did during the Allen auction, calls for expert planning and execution when it comes to the transporting, documenting, installing, protecting, and eventual legacy planning of the piece. 

To understand the possible pitfalls of art collecting and the importance of legacy planning, we spoke with Claire Marmion, Consultant at PURE Insurance; Capera Ryan, Deputy Chairman at Christie’s; and Daffan Nettle, Managing Director at UBS Private Wealth Management.

André Leon Talley’s collection on view at Christie’s.

Estate planning is a financial strategy that determines what happens to your assets after death. What is legacy planning, and how do they go hand in hand?

Claire Marmion: Legacy planning is taking all the critical work of estate planning and pulling it back through the lifetime of your ownership. That is, how you’ll protect an artwork’s condition, how you’ll share it, how you’ll promote the artist, and how you’ll actively work to preserve its legacy here and now, not just when your collecting journey is over. 

This is very important because a lot of emotion is bound up in art legacy planning. You buy a work of art because you love it, after all—it speaks to you and it’s part of your identity. Whether you’re supporting emerging young artists or building an established archive for your family, you’re the custodian of these pieces during this lifetime.

Occupying the role of custodian comes with responsibility, especially when considering how small, portable, and fragile some artwork can be. Rosa de la Cruz, the collector, said years ago, “My house in Miami is going down in value every day, but I can sell my artwork in any currency in any country in the world.” To do this, you not only have to navigate the financial planning but also the artwork’s critical physical protection and story. 

Protecting art is different from, say, cars, jewelry, or wine. What do you have to account for when it comes to being a steward of an art collection and all its materiality?

Marmion: Interestingly, private collectors will come to us very concerned about theft, when in reality, they are at much greater risk of water damage. A bath can overflow, a pipe can burst, an appliance can fail, ice dams can cause a leak in your roof, or flooding from a hurricane can cause your sewer to back up.

There are also small mitigation efforts collectors can make, such as putting tiny rubber or plastic bumpers on the back of frames so that if there’s a leak, the water runs straight past the painting down the wall instead of soaking into the back of the artwork.

The next most common type of damage is caused during transit, which accounts for about one in four art insurance claims. Every time you buy, move, or sell a work of art, the risk of damage significantly increases. For example, did you know that the surface of a de Kooning can remain somewhat tacky during its entire lifetime due to the salad oils the artist favored in his paint mix? While in transit, this work needs to float within its crate without any surface contact for it to remain pristine and protected. 

There’s also the everyday damage that occurs from vacuum cleaners, pets, children’s handprints, or the furniture delivery person to consider. With personal collections, you have to engineer the environment to mitigate risk in a way that you wouldn’t have to in a museum.

What are some other exposures that people commonly overlook?

Marmion: People will spend $40,000 on a home alarm system but never think to change out the 25-cent piece of hardware a painting has been hanging on for a decade when statistically, an artwork is far more likely to suffer damage falling off a wall than it is to be stolen.

We also help collectors consider exposures that aren’t insurable, like light fading. When a painting that has been heavily exposed to light over a 20- or 30-year period comes up for sale, its reds and blacks can be particularly faded. That has a direct effect on how much it can sell for. Everything we do in legacy planning is about maintaining the condition of the collection because physical risks can impact its financial value.

We monitor auctions like Christie’s regularly, as the art market can be volatile and the financial protections needed are constantly changing. 

Capera Ryan: To Claire’s point, it used to be that we would update appraisals every 10 years. Then it was five years, and now it may be two years with the rapid upward movement we are seeing in art values. 

Images courtesy of Pure Insurance.

What’s contributing to that pace of growth in the art market?

Ryan: There are so many more players and collectors entering the art market. People consider art to be a global currency, and as they move to diversify their portfolios, they’re investing in tangible assets.

We just had the collection sales of Paul Allen and Ann and Gordon Getty, both of which are examples of clients we’ve been working with for a lifetime. At one point, it was estate planning; then it became legacy planning as they explored putting their art into foundations and what their heirs were interested in, both philanthropically and artistically. 

It’s been a really interesting time in the market because you have these big names like Rockefeller, Getty, and Allen that resonate with so many different people. A lot of young people are starting to get more engaged with collecting and want to dip their toes in the art world. 

Further, with appraisals and condition reports available, people are increasingly more willing to bid on art online, sight unseen. Additionally, the rise of NFTs has been a jolt to the market—post-pandemic, Christie’s sold an NFT for $69 million and now has an entire NFT department. Our analytics tell us the average age of an NFT collector is 42, but we’re also seeing these new market entrants transition into other areas of collecting like handbags, wine and watches. These trends all work together to drive prices, and there’s never been more accessibility through the internet. 

How do you educate those who are new to the art market about protecting their purchases?

Marmion: We help people with a service plan, particularly from an insurance perspective. This challenges them to think through things they may not have considered via questions such as, “What’s your admin workflow? Is your financial coverage adequate at each location where your art is housed? What are your transit protocols so artwork isn’t getting damaged? Where will art be placed in your home to minimize exposure to everyday risks?”

On the financial side, there are best practices that we share with newer collectors. If you buy artwork from a living artist, you should find out if there is a certificate of authenticity, a condition report and crating instructions. We help guide them through the right questions to ask like: “Where has this been exhibited previously, or where is it planned to be? What literature has it already been referenced in? Is there an exhibition catalog?” Provenance planning needs to start right at the beginning of the collecting journey.

Daffan Nettle: Where UBS really plays a role is in legacy and estate planning. Everybody needs an estate plan, which includes a will. A will is an intentional plan for where your assets go. What we hate more than anything is for a family to have to sell a piece of art in order to pay estate taxes due to a lack of proper planning.  

Images courtesy of Pure Insurance.

Images courtesy of Pure Insurance.

What are some real-world examples of thorny issues in legacy planning?

Marmion: One of our clients is a young collector interested in diversifying and getting into the market, but he’s also a young dad with two kids, so his questions are about sibling rivalry. At the moment, there are two major pieces in his collection. To protect their identities, let’s say one is a Lichtenstein and the other is a Matisse. If he leaves one to his little girl and one to his little boy, his concern is, how does he ensure that 20 years from now, one is not worth four times what the other is?

Nettle: This is when it may make sense to buy the art in a trust, which can be owned by both beneficiaries and allows them both to benefit from the collection. It really gives a fair ownership structure. So, while the Lichtenstein hangs in one person’s home and the Matisse hangs in the other, they both own the art collectively.

You can also use a family limited partnership (FLP) or family limited liability company (LLC) to hold the art. I love using an FLP structure because you can give units of it over time to the children versus giving the artwork outright. 

Ryan: It happens all the time. People go through their collections and let their children pick a piece; some people are driven by the emotional aspect of it, while others might be more interested in financial gain.

Marmion:  Another common legacy issue is how tastes change over generations. We tackled this with one family by making a legacy catalog. A client couldn’t get his children or grandchildren to engage with his collection, so we started working with him on a legacy catalog and created this presentation of what London looked like in the 1950s. It laid out why he was collecting there and not New York—where artists were breaking ground at the time—and how his Joan Mitchell compared to the one that’s now at MoMA to tell his story. 

Nettle: That gets to the bigger picture. At UBS, we believe it’s important for a family to understand the story behind their art. We recommend that families have a mission statement and hold family meetings that include a discussion of the family’s history. For families where the art collection is a significant asset, these discussions should include the story behind different art acquisitions so that future generations can have a better understanding of the reason for the existence of the collection.  

A family art collection can also be used as a catalyst to keep multi-generational families close. Often, a family’s wealth was created by a family-owned business, and once the business is sold, many families have found that family members go different directions and do not maintain the close ties that they once did when they were constantly interacting about business operations. Having a family art collection can unite a family around a shared interest and help to keep them close.  

Marmion: If you start legacy planning when you begin collecting, you’ll be embracing everything that is good about collecting—and addressing how art is different from other assets. It’s the practice of being a good custodian, of protecting how much emotion and identity is bound up in it, and not least, how much you enjoy it along the way.

Images courtesy of Pure Insurance.

What is the future of legacy planning?

Marmion: As both Capera and Daffan suggested, clients aren’t thinking about this when they start their collecting journey. It has been 25 years since the Getty Object ID standard was launched, providing a basic framework for new collectors to catalog their purchases and create a database for art. I’d like to see the art trade, museums, conservators and insurers that came together to form the Getty Object ID come together once again to create a standard for legacy planning. This would ensure that we are all held to the same high standard as custodians and get everyone more involved in helping to protect and promote the contemporary artists that carry the voice of today.

Surface Studios is the brand marketing unit of Surface Media.

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