When gifting art, a donor should be mindful of the outcome and options. Such attention may reduce the chances of costly confusion or conflict, and avoid other pitfalls.
Preliminarily, the donor should decide if the gift is being made during her life or is a testamentary bequest. “There is an important distinction between the intent with which an inter vivos gift is made and the intent to make a gift by will. An inter vivos gift requires that the donor intends to make an irrevocable present transfer of ownership; if the intention is to make a testamentary disposition effective only after death, the gift is invalid unless made by will.” Gruen v. Gruen, 68 N.Y.2d 48, 53 (1986).
The donor should also make sure her intention is to make a gift, as opposed to a consignment, a loan or a sale. Once that decision is made, whichever it is, it should be duly documented and memorialized by both sides in writing. In Museums at Stony Brook v. Village of Patchogue Fire Dept., 146 A.D.2d 572 (1989), a museum brought suit against a village and fire department seeking possession of an antique fire engine the museum claimed had only been loaned to them. The Appellate Division held, in part, that “[w]hether this transfer constituted a sale, gift, or loan cannot be determined on this record.”
Without question, the donor should approach a transfer with utmost care akin to a commercial transaction for profit. For example, in Von Schuschnigg v. Sotheby’s Inc., 216 A.D. 2d 100 (1st Dept. 1995), the Court held that “[t]he essential elements of intent to make a present transfer, delivery of the gift (in this case constructive or symbolic) and acceptance by the donee were satisfied by evidence that the donor wrote to the Museum expressing a desire to donate the painting after his death while retaining its use during his life time; that the Museum advised the donor to confirm his gift by furnishing a photograph of the painting; the donor complied, and that the Museum gratefully acknowledged completion of the gift.” Id. at 101 (internal citation omitted). One would be well served by keeping thorough and written records in chronological order relating to the transfer.
The donor should also consider whether she desires to retain the art work during her life and grant a remainder interest. If so, physical delivery of the work is not generally required when the intent to make a present transfer is conveyed. “[S]uch a requirement could impose practical burdens on the parties to the gift while serving the delivery requirement poorly.” Gruen, 68 N.Y.2d at 57.
Furthermore, the donor should also be mindful that she may make conditional gifts of work ranging from the manner of exhibition of the work to the time for acceptance of the gift. If the donee fails to abide by the condition(s), the donor may recall the gift or convey it to another party, depending on the terms of the gift. In In re Riese, 100 A.D.3d 516 (1st Dept. 2012), the First Department held that “[t]he [lower court] properly enforced the terms of the stipulation and directed respondent to return the sculpture after it failed to deliver a countersigned deed to petitioner within the requisite time period following the offer to donate.” Id. at 517.
Accordingly, prudent planning should include careful consideration and documentation of the nature, timing, extent, and conditions of the transfer.
About the Author: Daniel S. Kokhba, Esq. is a Partner at Kantor Davidoff, Wolfe, Mandelker, Twomey & Gallanty, P.C. and focuses his practice on commercial law, art law and employment law. He may be reached at Kokhba@kantordavidoff.com or212-682-8383
Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.