An artist has a unique bond with their art creation or collection. After all, determining the value of an art depends on understanding the artist behind it. So, when an artwork comes in the middle of a high-asset divorce, it is most likely one of the most complex points of contention in property division.
Other states follow equitable distribution or what the court deems “fair but not necessarily equal” for marital property or property acquired during the marriage. Separate property, on the other hand, is anything owned or acquired before the marriage.
However, California’s community property laws mandate that any marital asset acquired or debt incurred during the marriage must have a 50/50 split. Separate property remains with its owner. Through commingling, like turning an individual bank account into a joint account, separate property becomes marital.
But when divvying up art that may eventually change in value over time, issues may be more complex than usual, even before the court steps in.
Processing what to do with the art
Upon identifying which piece of art – painting, film, song or collectible – is marital or separate, looking at the situation beyond a financial standpoint is vital. Approaching it with recognition of the artist-spouse’s sentimental attachment to their art may make for more accurate decisions.
Other steps to take may include:
- Making an inventory: List everything. Concealing assets can only result in further complications or future claims.
- Hiring an appraiser: Both parties may have their own and agree on a single appraiser. The art may be worth more than its original value. The appraiser can establish fair market values, providing each party’s counsel with precise grounds to negotiate in court.
- Working out an arrangement: The soon-to-be ex-couple may agree on the following terms:
- Artist-spouse can retain ownership rights and give royalties to the other spouse.
- Artist-spouse can give a percentage of the revenue to the other spouse. The percentage can incrementally decrease over a specified time.
- Artist-spouse can pay less than half of the art’s value to the other spouse if no one buys it over an agreed period.
- Artist-spouse can free the other spouse of debt liabilities when the other spouse gives up their potential earnings from sold art.
If both parties disagree on the terms, the court may sell the art and split the proceeds equally. Without a final divorce decree stipulating the property division terms, the artist-spouse cannot change the art in any way or form without the other spouse’s consent, and vice-versa.
Protecting rights to one’s art
Like the art itself, dividing properties in divorce has its own design. Having financial and legal resources to work with during these critical times proves invaluable. Doing so can help preserve the art’s values, even to the most personal.