We can see that Rauschenberg's friends have a keen sense and business experience.
Boston, MA (PRWEB) August 28, 2014
According to court documents outlined in the Charlotte Observer, a probate judge in Florida thinks that the work of three friends acting as co-trustees of the Robert Rauschenberg estate is worth $24.6 million, but they had already helped themselves to $8 million of the late American master's sizable estate. Nonetheless, In Re: The Estate of Robert Rauschenberg, Case No. 08-CP-002479, in the 20th Judicial Circuit of Florida, Lee County Probate Court, is far from over as attorneys representing the Robert Rauschenberg Foundation are preparing to argue the case at the appellate level (1).
According to a New york Times article, in 2012, the Rauschenberg estate was estimated to be worth more than $2 billion. Rauschenberg left a trust that appointed three close friends as trustees. The late artist spoke to his friends on numerous occasions about his wish to continue the philanthropic, advocacy and educational work of the Robert Rauschenberg Foundation, and these instructions were made clear on the trust. To this effect, the Florida probate court agreed that the work carried out by the trustees was worthy of compensation, but nowhere near the $60 million they had originally asked for (2).
Rauschenberg passed away in 2008. At the time, he had been living in Captiva Island for five years, and he had been working on his foundation for more than a decade. These days, Captiva Island is known as an artist retreat where Rauschenberg's profound artistic legacy is kept alive. Rauschenberg has been called “an American Picasso” by Jerry Saltz of ArtNet (3). According to guggenheim.org, the official Guggenheim website, he served in the United States Navy as a Hospital Corpsman and then dedicated the rest of his life to the visual arts. He is the spiritual godfather of the Pop Art movement, which would later be heralded by fellow American artists Roy Liechtenstein and Andy Warhol. He is a recipient of the United States National Medal of Arts (4).
According to New york Times, Bill Goldston, Bennet Grutman and Darryl Pottorf are the trustees in question. In 2012, they billed the Robert Rauschenberg Foundation for $60 million as compensation for their trustee services. Christopher Rauschenberg, surviving son of Robert and Chairman of the Foundation balked at this sizable request and paid the three friends $375K, a sum he considered to be reasonable. The trustees then turn around and sued the foundation (2).
“You can be a friend in need or a friend in need,” explains Rocco Beatrice of UltraTrust.com, a website managed by Estate Street Partners, LLC. “When Rauschenberg planned his estate, he did right insofar as leaving clear instructions as to how his assets should be handled. He wanted his legacy to live on through his Foundation, and that has certainly taken place to a large extent, but we don't know if that work is worth $60 million. What we can see in the decision by the Florida court is that the trustees' work is more than $375K, but much less than $60 million. And now we know that the trustees had already set aside $8 million for themselves.”
Legal experts in Florida have been following this case closely due to the implications on what constitutes reasonable trustee fees in the Sunshine State. Mr. Beatrice, who is the Managing Director of Estate Street Partners, has also been keeping up with this case: “This case affects asset managers and estate planning firms that serve as professional trustees, which is something that we often recommend to clients who are looking for irrevocable trust protectors. What is important to remember is that not everyone is cut out to perform the duties of trustee, especially when we are talking about estates valued at more than $2 billion.”
Mr. Beatrice continues: “We can see that Rauschenberg's friends have business experience; Goldston and Pottorf were close associates of the late artist, who was also a very keen and successful real estate investor. Grutman is an accountant. What do they know collectively about estate management? Rauschenberg certainly had the best of intentions when setting up his trust and appointing his three friends to serve as trustees, but he may not have followed what we call proper construction of a trust.”
In the Rauschenberg case, the trustees are basically asking that they be compensated at a rate of $40,000 per hour according to the New york Times. A legal expert working on behalf of the Foundation explained that an analysis of the work performed by the trustees could be fairly compensated at $250 per hour (2). “We must keep in mind that the Florida Trust Code merely states that trustees are entitled to receive compensation that can be considered fair and reasonable for the work they perform. This simple proclamation leaves the door open for litigation, which is one of the major reasons you want to establish a trust in the first place. What we can do to avoid this potential issue is to properly construct an irrevocable trust by establishing a customary trustee fee, which are typically set at less than one percent of the value of the trust.”
In the end, Mr. Beatrice insists on proper trust construction and trustee selection: “It is tempting to choose close friends as trustees, and they will almost always accept on the basis of friendship. But it is important to determine if they are up to the task. Just about anyone can handle a couple of estate distributions per year to a surviving spouse and children, but what about more complex tasks? A professional trustee who can manage the estate, serve as trust protector and perform based on fiduciary duty is a much better idea in this case.”
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1. charlotteobserver.com/2014/08/14/5106789/appeal-filed-in-rauschenberg-trust.html#.U_zMucZiKdE, 8/14/14
2. nytimes.com/2013/08/22/arts/design/rauschenberg-friends-seek-60-million-from-estate.html?_r=0 –, 8/21/13
3. artnet.com/magazineus/features/saltz/saltz1-11-06.asp, 1/11/06
4. guggenheim.org/new-york/collections/collection-online/artists/bios/1396, 1/1/09