On September 25, 2016, 60 Minutes highlighted an interesting estate planning issue involving Pablo Picasso and inter vivos gifts. An inter vivos gift is a transfer of property from a donor to a donee, during the donor’s lifetime.
This story involved the family’s long-time electrician of 15 years and family friend, Pierre Le Guennec, who claimed he was gifted a briefcase filled with the artist’s work. The briefcase contained 271 works and 2 full sketch pads, all unsigned, that dated from 1900-1932. Many years later, Le Guennec contacted the Picasso Administration in order to get the pieces valued for his own succession planning purposes, and to have the pieces authenticated. Picasso’s son, Claude, a representative from the Picasso Administration, met Le Guennec and his wife and assumed that the pieces were stolen due to inconsistencies in the story about how the pieces came into Le Guennec’s possession. The pieces were valued at around $100 million.
In February 2015, after authorities had the artwork seized and Le Guennec and his wife had been put in custody, Le Guennec went on trial. The authorities could not prove the theft but convicted Le Guennec of possessing stolen property. He was given a two year suspended sentence, along with his wife, and is appealing.
The aformentioned raises the question of how to prove an inter vivos gift. In order to perfect a gift, and to have a valid gift, there are three necessary elements:
- intention to donate;
- acceptance by the done; and
- sufficient act of delivery and transfer
As per Johnstone v Johnstone,  OJ No 58, the onus of proving that a gift is valid is on the recipient of the gift. The recipient must show a clear and unmistakable intention by the donor to have given the gift, and that the gift was given voluntarily by the donor.
In order to challenge an inter vivos gifts, the challenger must prove undue influence, fraud, coercion, mistake, or lack of capacity. We have previously blogged, and uploaded a podcast, on undue influence.
In order to properly document an inter vivos gift, it is best for the donor to show evidence of intention. Intention is the most difficult aspect of the test to prove, and without intention, the gift cannot be perfected. It is best to have witnesses who have seen the giving of the gift, or professionals such as solicitors who may have been aware of the gift. If intention is not proven, it will be assumed that the “gift” was instead a resulting trust. If an individual can show intention of both legal and beneficial title, the exchange will be seen as a gift.
Thank you for reading,
Cornelius Gurlitt passed away in May 2014, aged 81, and is well known amongst the art community for his vast collection of famous works of art ranging from Chagall to Picasso. A recent article in the Guardian highlights the storied controversy surrounding Gurlitt’s estate and the steps taken to comply with his Will.
Much of Gurlitt’s famed art collection was passed down to him by his parents and grandparents who allegedly obtained much of the artwork by Nazi theft during World War II. In 2012, during a tax investigation, German customs officials discovered over 1,000 pieces of art worth an estimated 1 billion euros.
According to the Wall Street Journal, while on his deathbed, Gurlitt apparently signed a Will bequeathing his estate (including the artwork) to a small museum in Bern, Switzerland, the Kunstmuseum Bern, on the condition that the museum take steps to determine which works had been stolen by the Nazis and to return those pieces of art to their rightful heirs. Apparently the choice of a foreign institution was made on the basis that Gurlitt felt the German government had treated him unjustly.
It appears that in the event the museum declined the collection, it would pass to Gurlitt’s distant relatives. Concern arose that in the event these relatives beneficially received the artwork, it would be difficult to ensure they complied with Gurlitt’s instructions for restitution. As such, pundits urged the museum to take on the task to ensure that the research into the artwork was done professionally and responsibly.
The museum has since accepted the artwork, with sorrow, and is showcasing Gurlitt’s pieces in conjunction with a second museum in Bonn, Germany, the Budeskunsthalle. Although the showcasing in Bonn seems contrary to Gurlitt’s request for a foreign museum, the museum is nonetheless following Gurlitt’s most prominent wish to ensure stolen artwork is returned.
Proceedings were commenced by the distant relatives to challenge the Last Will on the basis that Gurlitt was not of sound mind when drafting the Will. A successful Will challenge would result in the artwork passing to them. The proceeding was dismissed by a German Judge, while an appeal remains pending.
I find Estates intertwined with famed art to be an enjoyable topic to research and read, as per my prior blog about the 2015 movie, Woman in Gold. Perhaps though, it’s just an excuse to admire such beautiful artwork, with Gurlitt’s collection being one of the best.