If a divorcing Pennsylvania couple has an art collection, dividing it may be complex. In several high-profile divorces, what happened to the art collection become a major point of contention.
There are a number of potential issues. For example, a person going into a marriage with a significant collection might want a prenuptial agreement. However, in one case, the prenup was thrown out because it was written in German, and the spouse who signed it could not read German at the time. Another issue is record keeping. While a bill of sale might list one spouse as the buyer, what is actually more important is where the funds came from and whether it was a joint account. Art may need to be appraised, but different appraisers may have wildly different figures. One attorney who works on such cases has pointed out that the only way to truly determine the value of a piece of artwork is to sell it.
If one or both spouses is an artist or art dealer, it can be difficult to separate personal and business assets. Another scenario that may arise but that is rarely addressed in prenups is what happens if the couple has made a large donation and a gallery or wing is named after them both. If one spouse paid for it, that person’s wishes will probably be followed.
There are other assets that might also create problems during property division for high-asset couples. For example, assets such as pensions and annuities may have a number of complex rules around being divided. A complex document called a qualified domestic relations order is necessary when dividing a pension, a 401(k) and certain types of annuities to avoid taxes and penalties. If one or both spouses own a business, one may have to buy the other one out.