Marina Picasso, granddaughter of Pablo Picasso, has sent ripples through the art world with her announcement that she is going to sell of her inheritance of approximately 10,000 works to fund her charitable work. The fear is that she will flood the art market and severely depress prices for Picasso works. Needless to say, her decision is causing strife amongst an already contentious family. In fact it is the family strife that is one of the factors behind her decision. While she loves her grandfather, she feels his legacy has brought her too many problems, and that she wants to be rid of his works to be able to leave these problems behind.
As far as I know, there is no legal way to stop her from selling the collection all at once, although I wouldn’t be surprised if the other family members file with a court to stop a sale. It is her property to do with as she pleases. But fears that she will depress the art market are not unfounded. Whether it effects the entire art market depends on the nature of what she has to sell. Picasso worked in a large variety of mediums and was extremely prolific. If she floods the art market with a particular medium (say his sketches on paper), this will not necessarily impact the market for his paintings or sculpture. Further, if she only floods the art market with a particular era of his works, this will not necessarily impact the sale of other eras. But if her collection contains a large assortment of his works from several periods, she could very well depress the art market for Picasso works for years to come.
I have seen what happens when a large number of an artist’s works are sold all at once. The artist was no where near the caliber or had the name recognition of Picasso, but he had a following. Because the family could not agree on how the paintings should be disposed of, they refused to wait to maximize the art market because they wanted a quick payout, and the artist himself never left instructions on how this works were to be managed, approximately 1500 works were sold at auction in one afternoon. They were not sold individually, but in large lots, and sold for a fraction of their value. When I work with an artist to create an estate plan, I counsel her to have a plan in place for how her works are to be disposed of after her death to prevent a massive devaluation of not only her work but her reputation. (An art market flood can easily destroy reputation as much as it destroys value.) This includes plans to sit on works, perhaps for years, before they are sold and selling them in various markets across the country (or even the world, in the case of Picasso). It requires an executor who understands the art market and is competent to handle an artist’s works after her death. This person may be a completely different person than the executor of the artist’s general estate. In addition to the physical works, there must be a plan in place for handling the intellectual property of the works.
Hopefully Ms. Picasso will find the right people to help her. If her ultimate goal is to finance her charitable works, then it is in her best interest to maximize the value of her collection, even if it means she has to sell it over the next several decades. It is within her legal right to turn over the collection to a third party to manage if she no longer wants to care for it or to have it around her. And a proper plan of sale might be enough to mollify the other family members and prevent years of nasty litigation.