When New York art dealer Ileana Sonnabend passed away in 2007 her children inherited an art collection valued at about 1 billion dollars. One of the pieces, “Canyon” by 20th century artist Robert Rauschenberg included a portion of a stuffed bald eagle. Due to the 1940 Bald and Golden Eagle Protection Act and the 1918 Migratory Bird Treaty Act, it would be a felony for the children to sell the piece. Since it appeared non-saleable, the art appraisers valued the piece at “zero”for estate tax purposes. The IRS rejected this valuation and its Art Advisory Panel then valued “Canyon” at $65 million and currently seeks $29.2 million in taxes including a healthy amount in non-payment penalties.
I think the IRS is getting really greedy. The children already paid $471 million in federal and state taxes related to their mother’s art collection which included works by Jasper Johns and Andy Warhol. They had to sell off a large portion of the art collection to raise the taxes owed. The IRS has also been inconsistent. A year ago, the IRS sent the family an unsigned draft report valuing Canyon at $15 million and when the children refused to pay citing the unsaleable condition of the piece, the IRS increased their valuation to $65 million. The IRS does not have to rely on the Art Advisory Panel’s valuation. In about 7 % of cases, the IRS does not follow the Panel’s opinion.
An important query relates to how the Panel arrived at the $65 million figure. Generally comparable sales are used to determine the value of the work based on the willing buyer, willing seller rule. However in this case there is some speculation that black market sale value was considered which brings into question the entire valuation process. We are all waiting expectantly to see what happens next.
Taylor Swift is dating barely legal Conor Kennedy. Conor Kennedy is the son of Mary Richardson Kennedy who was married to Robert Kennedy Jr. Robert Kennedy Jr. was one of Bobby and Ethel Kennedy’s 11 children. Mary Richardson Kennedy, who was suffering from alcoholism and depression and in the midst of a messy divorce hanged herself on May 16, 2012 in the barn near to their Bedford, Mass. home. And to make matters more Kennedy, Mary’s family was in a feud with Robert Kennedy Jr. as to who would have control of Mary’s remains. But, Mary passed away without a will, so, her almost ex-husband was allowed by court order to take control of his wife’s remains.
Mary’s family argued for control of Mary’s body and her money, but without a will to express her wishes, Mary could not direct what happened. Robert Kennedy Jr. was allowed to bury his ex-wife’s remains in Massachusetts. But why did Robert Kennedy Jr. later have Mary’s body exhumed and reinterred 700 feet from the rest of the Kennedy family? Kennedy Jr. claims the first plot was too crowded and he moved her body to have more room to bury more Kennedys. And there’s an obvious need. Most interestingly, the Judge appointed Conor co-executor of his mother’s estate on his 18th birthday in response to the motion made by his attorney on that day. Conor, as the eldest of their four children that resulted from their marriage was the obvious choice to administer his mother’s estate since his father was almost divorced from his mother. However, a child must reach legal age in order to take on this fiduciary responsibility.
So what do we take away from this? Mary should have made a will – and anyone in the midst of a divorce should redo their estate plan immediately– then she could have had control over her funeral wishes and her share of the marital property.