ART OF DIVORCE: CAN MY SOON-TO-BE EX-SPOUSE LAY CLAIM ON MY ART?
You know that African-inspired facemask collection you bought on a whim from an exotic art gallery in London ten years ago for $5,000? Well, now that you’re getting a divorce, your soon-to-be ex wants a piece of it. The problem is, your appraiser says it’s worth $25,000 and her appraiser says it’s worth $2,500.
And how about the highly celebrated dolphin sculpture you made, which toured the world – from museum to museum – in the 1980s and is now worth millions, but you wouldn’t sell it if your life depended on it? Can your soon-to-be-ex lay claim on that, too, the art you created with your own hands?
Battling over art in a California divorce
Art collecting, art investing, and art creation are wonderful hobbies, and a great way to collect assets to later cash in on when they increase in value. But these pursuits can also result in a lot of complicated negotiations, disagreements and – for lack of a better word – headaches when couples have to divvy them up in a divorce.
With certain exceptions, everything you and your spouse acquire during the course of your marriage – from the day you say “I do” onward – will need to be divided in the divorce process. This includes your family home(s), vehicles, bank accounts, furniture, and art. Believe it or not, if you are an artist and you have created valuable pieces of art during the course of your marriage, those will need to be divided, too. This often comes as a rude surprise to many artists who see their work as their very own children, born from the uniqueness of their imaginations and skill.
Here’s what the law says
According to 1987 case law by the California Court of Appeals, state courts will look at any artwork, acquired or created as marital property. This applies to authors and others who own or have created copyrighted material, too. The only exception in this regard relates to artwork and copyrighted material owned or created before a marriage, and materials produced or acquired following separation or a divorce filing.
Protecting your rights while dividing art assets in a divorce
Regardless of whether your art was created or acquired during your marriage, it will be necessary to place a value on the assets during your divorce process. California spouses need to be very careful to protect their rights in this regard by ensuring that appropriate value is placed on each of these assets. A number of appraisal theories might apply to different pieces of art depending on whether the art is finished, what the current market value is projected to be, and whether capital gains taxes will apply to the art upon sale.
For example, the often-overlooked consideration of tax-liabilities needs to be brought into clear view. Art that has depreciated in value will not incur capital gains taxes and could allow the spouse to claim a loss on the asset once it is sold. Meanwhile, art that has risen in value will not be worth its true appraisal figure, as capital gains taxes will need to be paid after liquidation.
Navigating art division in a divorce can be assisted through the guidance and counsel of an experienced divorce lawyer. A divorce lawyer will know what needs to be considered, and what kind of appraisals will be necessary to ensure that the asset division rights of his or her client will be protected during the divorce process.