Potential issues in dividing an art collection

Some couples in Pennsylvania that are going through a divorce may face some complexities around property division, such as the division of an art collection. Even if a couple has a prenuptial agreement in place, it may not specifically address the art, or it could be declared invalid.

The latter situation happened in one divorce when it emerged that the prenup was written in a language that one person did not understand at the time she signed it. Another divorce case involving an art collection and a prenup ended up setting a precedent when an appeals court in New York ruled that bills of sale were not necessarily reliable indicators of who had paid for a piece of art. In that case, the couple’s prenup did not mention the art specifically, so they ended up arguing over it in court. When determining who paid for art, whether the funds came from a joint or individual account could be significant. If one person is an artist or an art dealer, it can also create complications in determining whether art belongs to an individual or a business.

Another potential issue is determining what the art is worth. In one high-profile case, appraisals of a collection went as high as $1 billion but differed by hundreds of millions of dollars.

Property division involving a home, a business, investments or even a retirement account can also create complications. For example, neither person may be able to buy out the other’s ownership of a home or business, and the market for selling could be weak as well. Furthermore, even if just one spouse owns the business, the other could have a claim on it. Splitting some types of retirement accounts could result in taxes and penalties without the proper documents in place. An attorney might be able to discuss these potential pitfalls and options for managing them.


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