THE WALL STREET JOURNAL

September 15, 2007

Recently, a respected art collector in Portland, Ore., walked into a local gallery. The owners greeted her warmly, and ushered her to the back room to show off their latest acquisitions. After politely declining several works, the collector chose a $5,500 porcelain sculpture shaped like a basket and covered in tiny, platinum elephants. “She has such a great eye for art,” gushed the gallery's co-owner, MaryAnn Deffenbaugh.

The collector, Dakota King, is 9. In a collision of the art boom, the wealth boom and the Baby Einstein approach to parenting, galleries and auction houses around the country report that children who aren't old enough to drive are building collections that include works by Jasper Johns, Andy Warhol, Camille Pissarro and Rembrandt. At Sotheby's in New York, an 11-year-old boy with blond ringlets waved a paddle last fall and successfully bid $352,000 for a Jeff Koons sculpture of a silver gnome. Some teenagers are flipping art for quick profits. A few grade-schoolers are even loaning works to major museums, including Houston's Museum of Fine Arts, a coup for a collector of any age.

The $6 billion-plus global art market has more than doubled in four years, thanks to the growing number of wealthy patrons and an influx of new collectors from Russia and Asia. Now, children are emerging as one more niche. Collectors such as Bil Ehrlich, a New York real-estate developer, and Peter Brant, a Los Angeles-based film producer and magazine publisher, pay for their kids to collect works from name-brand artists. (All but the youngest of Brant's nine children collect art.) Other kids receive art allowances – a $5,000 cap per piece is typical – or buy art with their birthday, bar mitzvah or even tooth-fairy money.

Dakota King started amassing contemporary art in 2002 – at age 4. Her great-grandfather collected Old Masters and her father, Internet and software entrepreneur Ray King, and mother, Deneen, collect Minimalists. So far, Dakota says she has focused her 40-piece collection on works featuring animals and “happy colors” such as pink and yellow. An early buy, hanging above her tea-party table, is an Andy Warhol panda from his 1983 series on endangered species. Her dealer spotted it at a gallery in Los Angeles.

“Panda is darling and chubby and cute, and at night he protects me,” Dakota says.

Some dealers worry about entrusting masterworks to occasionally grubby hands. New York dealer Sara Tecchia says she won't sell to minors. “A work of art is a projection of the artist's soul,” Tecchia says, and she doesn't “want a 13-year-old buying it as if it were a video game.” Neither does New York dealer Rachel Lehmann, who says she would feel “uncomfortable” selling a piece to a child unless his or her parents supplied art-history lessons on the side.

“Part of collecting is experience,” Lehmann says, “but how much do you really have at 7?”

There's also the risk of damage, though dealers admit adults can be clumsy, too.

But there are upsides to mixing kids and fine art. Families can reap potential tax benefits by putting art in a trust set up for their children. The move can sidestep a federal estate tax of up to 45 percent of the art's value if children had instead inherited it after their parents die. There are several disadvantages to trusts: If a piece of art is valued at $1 million or more, parents may be taxed when they move the work into the trust. The strategy also could hinder parents from selling or loaning a work.

Still, such art trusts are finding fans. Ehrlich, the New York developer, says he met with a lawyer just this week to set up one for his children. Ehrlich, whose 13-year-old son, Ace, is a collector, says having his children buy art is a way to encourage them to spend money in lasting ways. “We want our kids to feel the same way we do about art, but we also want to keep them grounded, and that's tricky,” he says.

 »Next Story»