When it comes to splitting assets in a divorce, the framework is relatively straightforward: marital property is divided but separate property is generally given to the individual spouse it belonged to originally. Technically, art is no different from pots and pans when it comes to property division, but the reality is that the law is not clear-cut when it comes to artwork's divorce in the divorce process.
Many high-profile cases hinge on artwork these days and, with millions on the line, it may come as no surprise to New York residents that these pieces of art can lead to hotly contested disputes. With the cost of art skyrocketing, their disposition has become even more difficult. When couples do not agree amicably, they may end up hiring appraisers. This process itself is highly subjective and can cause even more dispute. Oftentimes the only way to actually get an accurate value of the art is to sell it, which is what many people don't want to do.
One way to protect artwork is to address it in a prenuptial agreement. When it comes to separate property, including artwork one inherited or stands to inherit, prenuptial agreements can serve as a useful tool to protect assets, yet many forget to add a specific framework to protect art acquired during the marriage. Keeping a detailed record is essential in this regard, whether or not a prenuptial agreement exists, as it is essential to find the source of the funds used to purchase the work. In an instance where art was not covered in a premarital agreement and only one party's name appeared on the invoice, the court agreed that the invoice itself was not a reliable document.
Complex property division, including arguments over valuation of artwork, can drag on for years and leave people bitter and frustrated. Creating a detailed prenuptial agreement from the onset can be highly beneficial in protecting one's financial interests in the event of divorce. An experienced attorney may be able to help guide New York residents through this oftentimes difficult process.