Asset Division: Dividing Art in Your Divorce
By: M. Scott Gordon
In any divorce, but particularly in a high net worth divorce, a married couple may own valuable art or other collectibles that will need to be divided as part of the asset division process. Under the Illinois Marriage and Dissolution of Marriage Act (IMDMA), any property that is classified as marital property is subject to division according to a theory of equitable distribution. This means all marital property will be divided between the spouses in a way that is “fair” to both of them, based on a number of different factors.
While some property is easy to value, property like paintings and sculptures can be especially difficult to distribute given the ways in which values fluctuate. An article in The Wall Street Journal provides tips for dividing art in a divorce and we want to say more about ways of valuing and distributing a marital art collection.
The first and most important step you can take when you are planning for a divorce and know your art collection will be classified as marital property (and thus divisible) is to make an inventory (including photographs of the items). This list should provide as much information as possible, including descriptive information about each piece, as well as details about when and where you purchased the object, as well as the purchase price. Making an inventory can help to ensure neither spouse attempts to hide art works prior to the divorce. The inventory can also help you to think through which items are likely to be high-value objects and may need multiple appraisals.
Even if you have had your art collection appraised in the past, it is important to understand the market values for art works and other collectible items significantly fluctuate over time. Accordingly, you should have your works appraised shortly before the process of asset division. In many cases, it makes sense for each of the spouses to hire an appraiser and to split the difference in appraisal values. Or, when appraisal estimates are drastically different, it could be logical to get a third opinion for a particularly valuable item. If the spouses can agree to work with a single appraiser, that is also an option.
Assuming you have your art insured and you have made plans for particular individuals or entities to inherit these pieces, it is important to update that information once asset division occurs. Depending upon which pieces you retain, you will need to update any insurance information (along with new appraisal information). You will also need to update any estate planning documents concerning the pieces that remain in your possession.
Contact an Asset Division Attorney in Chicago
Dividing art, as well as other high-value items, can be complicated in a divorce. However, a property division attorney in Chicago with experience handling high net worth divorces can assist you. Contact Gordon & Perlut, LLC today to learn more about the services we provide to clients in and around Chicago.