A couple of thoughts --
On the copyright/model issues, the contract will trump the presumptions in the statutes (assuming of course that the contractual provisions are legal). My point is that, like probate, you can either specify what you want to happen (by Will [or contract]) or the government will do it for you. One is more fun for everyone, usually.
I sold a lot of work to the children's magazine, "Highlights". Their contract rather uniquely (in that business) specifies that they get everything, including copyright. I was happy with that at the time. But when one of my stories got picked up for an anthology, Highlights got the dough. I wasn't terribly unhappy about that (it was still my story, my byline, and my publicity), but I've never been embarrassed to cash a check and would have been happy to do so again, even if on residuals.
The other matter: Lon, if you think it would help, post the image of your painting, together with the reference photo, in our Critiques section. Perhaps nothing useful will come of it, but perhaps a small handful of tips will make all the difference for this client and your story will turn out happily and instructively for all who are following it.
Cheers
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