The FBI is now saying that "at least 20 pieces" from the collection William Kingsland left behind are stolen, including a million dollar Giacometti bust. They've gone ahead and posted photos online "in the hope that the rightful owners will come forward and claim the works."
Jim Wynne of the FBI art crimes unit is quoted as saying, "Whether he was a thief or a good-faith purchaser, we couldn't come to a conclusion on that. All we know is he ended up with this stuff." It certainly matters to potential buyers: if Kingsland was a thief, he (and his estate) can't transfer good title to the works; if he was a good-faith buyer in the ordinary course of business, on the other hand, it's possible that, under certain circumstances, he could.
UPDATE: Much more from the New York Times today. "If nobody comes forward who can make an ironclad claim to any of these works, said the [Manhattan public administrator, who oversees intestate estates], they will indeed be auctioned off and the proceeds turned over to Mr. Kingsland’s estate. And as it happens, four first cousins of Mr. Kingsland’s and an uncle have contacted her office to declare themselves his rightful heirs."
The Cranky Professor doesn't know if "they'll ever work it out - [Kingsland] didn't leave much paper trail. On a guess, he seems to have been willing to buy things that weren't well-documented."