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July 30, 2019 Practice Points

The Art of Divorce

What happens when there are collections of art acquired by the spouses during or before the marriage, or if one of the spouses is an artist or art dealer?

By Jonathan W. Lounsberry

Dividing property is part of the divorce process. Sometimes it’s easy; other times it’s a bit more complex. For instance, what happens when there are collections of art acquired by the spouses during or before the marriage, or if one of the spouses is an artist or art dealer?

The short answer is, it depends. There are several factors that must be examined to determine how this type of property should be divided:

  • Was the work of art purchased by the parties purchased during the marriage?
  • Was the work of art inherited by or gifted to one of the parties?
  • Has the work increased in value from the time of purchase to the time of the divorce?

With the valuation and division of complex assets, there are any number of factors to consider and this list only sets forth a sample. It is also particularly important to know whether you are in a community property jurisdiction or an equitable division jurisdiction, because each jurisdiction will have its own laws on valuing and dividing assets.

The question really becomes interesting when one party is an artist or an art dealer. While it is likely that most artists would not consider their work “property” and would likely consider it theirs by right as they created it, what is less clear is how a court would treat this type of property.

Artwork created or purchased during the marriage may be treated as marital property subject to division between the parties. Likewise, artwork created or purchased before the marriage or after the date of filing may be treated as non-marital property. (Also, keep in mind the underlay of determining the income of an artist or art dealer, as well as whether the art dealer’s business is marital.)

Then, there is the issue of valuing the artwork and treatment of any future proceeds—for example, the parties may agree for one spouse to own the piece of artwork, while the other owns the copyright to that piece of artwork. The difficulties in dealing with the division of artwork—or for that matter, determining the income of an artist—are only limited to the imagination.

At the end of a divorce, the parties are likely to derive equal portions of the marital estate, but complex issues of property division require serious attention. Since, it is not readily clear how artwork would be treated, it is important to have the guidance of an expert who regularly deals with these types of assets, particularly when there is the added layer of complexity brought by issues of intellectual property, to what can already be an immensely difficult process.

Jonathan W. Lounsberry is senior associate at The Stevens Firm, P.A., in Spartanburg, South Carolina.

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