Artist estates in France: succession for artists' families

Valuing the studio: legal bases first, then a method

French inheritance tax is based on the market value of the assets on the date of death (CGI, art. 666; BOI-ENR-DMTG-10-40-10-10), assessed in the condition the assets are in on that date. For works of art, the law adds valuation bases that prevail over the heirs' own estimate.

• The stock is, in principle, outside the 5% allowance. The classification depends on the actual use of each work. Paintings that furnish the home may be household furniture (Cour de cassation, commercial chamber, 17 October 1995, no. 94-10.196). Works kept in a studio, a store or a safe are works of art: they are valued separately under article 764, II of the CGI (BOI-ENR-DMTG-10-40-10-20, § 10 and 20).
• The order of the legal bases. The net price of a public sale held within two years of death comes first. Failing that, the tax authorities apply the higher of the values stated in a valuation document drawn up within five years of death (inventory, even if not in the form required by the Civil Code, division deed, delivery of legacies) or in a theft or fire insurance policy in force on the date of death and taken out by the deceased, their spouse or their predecessors less than ten years before death, the average if there are several policies; failing that, the heirs' detailed estimate. Evidence to the contrary remains possible (CGI, art. 764; BOI-ENR-DMTG-10-40-10-20, § 140 to 160).
• What the tax authorities use to check. Insurance policies, inventories, recent purchase prices and the market prices of the works published in specialist reviews and auction results (BOI-ENR-DMTG-10-40-10-20, § 20).
• The discount question. Neither the CGI nor the BOFiP sets a discount rate for a studio stock. But a studio of several hundred works does not sell at the unit price of the best results: the market value of each work reflects what the market can absorb, its condition, its period and its documentation. A reduction is supported by evidence (sales history, realistic pace of sales, reasoned expert opinions), never by a flat percentage.
• Copyright as an asset. The economic rights in the work (reproduction, publishing, licences) are part of the estate. There is no statutory method: the firm has them valued from the contracts in force, the royalty history and the remaining term of protection.

A poorly kept inventory costs twice: in inheritance tax, then on resale, because the declared value becomes the acquisition price for the capital gains option. An auction within two years of death sets both the estate value and that acquisition price: see selling an art collection: seller advisory.

Who decides for the work after the artist's death

• Moral rights. The right to respect for the author's name, status and work is perpetual, inalienable and imprescriptible; it passes on death to the heirs, and its exercise may be conferred on a third party by will (CPI, art. L. 121-1). It cannot be sold or given away.
• The right to publish posthumous works. It is exercised, for their lifetime, by the executor or executors appointed by the artist; failing that, and unless the artist decided otherwise, by the descendants, then the spouse who is neither legally separated nor remarried, then the other heirs, then the universal legatees or donees (CPI, art. L. 121-2).
• Two different executors. The Civil Code executor's mission ends at the latest two years after the will is opened, unless extended by the court (Civil Code, art. 1032). The executor appointed for moral rights exercises them for life (CPI, art. L. 121-2). The will should say clearly who does what, and how decisions are taken when there are several holders.
• Deadlock. Notorious abuse in the use or non-use of the right of disclosure, or a conflict between the artist's representatives, may be brought before the court, which may order any appropriate measure (CPI, art. L. 121-3).
• Economic rights. They last, as a rule, for the calendar year of death and the following seventy years (CPI, art. L. 123-1), subject to the extensions provided for works published during the world wars and for authors who died for France. The surviving spouse who is not legally separated enjoys a life interest in the exploitation rights the artist did not dispose of, reduced where there are forced heirs and ending on remarriage (CPI, art. L. 123-6).

Ownership of the works and moral rights can thus end up in different hands: one heir receives paintings in their share, another exercises moral rights over the whole body of work. The firm drafts the testamentary clauses and, after death, the governance rules that keep each exhibition, reproduction or restoration from becoming a dispute. For who receives what between children, spouse, legatee and foundation, see moral rights, resale right and catalogue raisonné: what an artist's heirs receive.

The resale right passes to the heirs for seventy years

The resale right (droit de suite) is an inalienable right to a share of the proceeds of any sale of an original work of graphic or plastic art after the first transfer by the artist or their successors, when an art market professional acts as seller, buyer or intermediary. It is payable by the seller; the professional involved is liable for its payment (CPI, art. L. 122-8). It benefits nationals of the European Union or the European Economic Area; other artists benefit if their State protects the resale right of European authors or, on application, if they are habitually resident in France and have taken part in French artistic life for at least five years.

After death it continues for the heirs and, for the life interest, the spouse, for the current calendar year and the following seventy years. Subject to the rights of descendants and of a surviving spouse who is not divorced, the artist may bequeath it, for instance to a foundation; with no heir and no legacy, it passes to the universal legatee or, failing that, to the holder of the moral rights (CPI, art. L. 123-7).

It does not apply where the seller bought the work directly from the artist less than three years before the sale and the price does not exceed EUR 10,000 (CPI, art. L. 122-8). Professionals must give the rights holders, or the collective management organisation they have appointed, the information needed to calculate the amounts due for three years after the sale. For collection in practice and a worked example, see the resale right for artists' heirs.

The archives carry the value of the work for decades

Notebooks, studio photographs, correspondence, sales and consignment records: these archives date, attribute and trace the provenance of the works. They feed the catalogue raisonné and the opinions on authenticity the market asks for before any significant sale. A family that sorts or disperses them in the months after death deprives the work of its evidence.

French law leaves the author of a catalogue raisonné wide freedom: the Cour de cassation holds that refusing to include a work, even an authentic one, cannot be treated as wrongful in the absence of a specific statute (first civil chamber, 22 January 2014, no. 12-35.264). The issue is organisation, not litigation.

• Decide who holds the archives (joint ownership, a designated heir, an endowment fund) and on what terms researchers and experts may access them.
• Separate the holder of the moral rights, the author of the catalogue raisonné and the body that issues opinions on authenticity, with written rules on referral, timing and reasons.
• Plan how the catalogue is funded (economic rights, resale right, endowment) and how the archives are preserved digitally.

On disputes arising from refused certificates, see refusal of a certificate of authenticity.

Giving the work a structure that outlives the heirs

• The endowment fund (fonds de dotation). Created by Law no. 2008-776 of 4 August 2008 (art. 140), it acquires legal personality from the publication in the Journal officiel of the declaration filed with the prefecture. The founders contribute an initial endowment of at least EUR 15,000 in cash paid during the first financial year (Decree no. 2009-158 of 11 February 2009, art. 2 bis). A legacy may be made to an endowment fund that does not yet exist at death, provided it acquires legal personality within the following year (2008 Law, art. 140, IV). It can hold works, archives, economic rights still held by the estate and, by legacy, the resale right; the exercise of moral rights can only be conferred on it by will.
• The foundation recognised as being of public utility. It is created by a decree of the Conseil d'État (Law no. 87-571 of 23 July 1987). Recognition requires an endowment and a public-interest programme of some scale, and a long review: it is prepared during the artist's lifetime.
• Tax on the transfer. Gifts and legacies to endowment funds meeting the conditions of article 200, 1, g of the CGI are exempt from gift and inheritance tax, as are those to public-utility institutions with the features described in article 200, 1, b or f bis, which covers cultural bodies (CGI, art. 795, 2° and 14°).
• Governance. The family's seats on the board, rules for selling works, loans and exhibitions, role in authentication: this is where future conflicts arise, more than in the choice of legal form.

For a detailed comparison, see foundation and endowment fund for an art collection.

The tax calendar should not dictate the sales

• The deadline. The French inheritance tax return is, as a rule, filed within six months of death if the artist died in mainland France and within one year in other cases (CGI, art. 641), subject to special rules for the overseas departments and for certain real estate (CGI, art. 641 bis and 642); the tax is paid on filing.
• Payment in instalments. On request and against security, the tax is paid in three instalments over one year at most. Where at least 50% of the estate consists of illiquid assets, the period rises to three years and seven instalments; since Decree no. 2014-1565 of 22 December 2014, works of art, antiques and collectors' items count as illiquid assets. Interest is charged (CGI, art. 1717; CGI, Annex III, art. 404 A; BOI-ENR-DG-50-20-30, § 82 and 85).
• Deferred payment. For an heir who receives bare ownership, the corresponding tax may be deferred until six months after the life interest ends or the bare ownership is sold, as a rule with interest, unless the heir opts to pay tax on the full ownership value (CGI, Annex III, art. 397 and 404 B).
• Dation in payment (payment in kind accepted by the State). Inheritance tax may be settled by handing over works of art, books, collectors' items or documents of high artistic or historic value, subject to approval, where the tax so settled is at least EUR 10,000. The offer cannot be withdrawn for six months, and the approval sets the value in discharge of the tax, which the heirs may accept or not. The five-year holding condition does not apply to works received by inheritance or gift (CGI, art. 1716 bis). See dation in payment of artworks.
• Orderly sales. When works must be sold, a prepared sale within two years is better than scattered disposals: the hammer price becomes both the estate value and the heirs' tax acquisition price.

Dividing works that are not alike

On death, the heirs become undivided co-owners of the studio (indivision, a French regime with no right of survivorship). No one can be compelled to remain in joint ownership (Civil Code, art. 815). Joint owners holding at least two-thirds of the rights may carry out acts of administration, grant a management mandate and sell movables to pay the debts and charges of the joint ownership; any other sale requires unanimity (Civil Code, art. 815-3).

A gift-partition protects the family against a rise in the market after death, which would make lots that were balanced at the outset unequal. See gift-partition of an art collection and usufruct and bare ownership.

When the family or the works have left France

• What France taxes. If the artist was tax-domiciled in France, all assets are taxable in France wherever they are. Otherwise, France taxes assets located in France, and all assets received by an heir domiciled in France who has been so for at least six of the previous ten years (CGI, art. 750 ter).
• Double taxation. Foreign tax paid on assets located outside France is credited against French tax (CGI, art. 784 A). France has estate tax treaties with only a limited number of countries; with Switzerland, the 1953 treaty no longer applies to deaths since 1 January 2015.
• Which civil law applies. In the European Union, succession is in principle governed by the law of the State of the deceased's last habitual residence, who may choose the law of a State of nationality (Regulation (EU) no. 650/2012). Tax remains national.
• Works outside France. A work kept or sold abroad must still be declared if the estate is taxable in France, subject to any applicable treaty; taking a work out of France may require an export certificate depending on its type and value.

For artists or heirs based in the United States, see France-US estate tax; for collectors, transferring an art collection and estate planning in France.