When Artists Divorce

divorce-feature

How much more enjoyable it is to speak of love and marriage than of splitting up, but divorce happens, and it happens to artists at probably the same rate as for everyone else. Marital property – everything acquired during the marriage – needs to be divided in some way: the cars, the house, the bank account, the furniture. So, too, the artwork created by the artist-spouse, and along with the physical objects are current and future revenues from licensing as well as the copyright.

Does any of this come as a surprise? “Artists tend not to think of the artwork they create as property, marital or otherwise,” said Barbara J. Gislason, a lawyer in Minneapolis who specializes in both family law and intellectual property. Artists often look at their unsold creations, which may be placed in storage, stacked somewhere in the studio, decorating the house or on consignment to a gallery, as theirs by right. The courts, however, view any artwork created during a marriage as community or marital property, to which the non-artist spouse has an equal claim. (That extends to copyright, which a 1987 ruling from the California Court of Appeals belongs not “only to the author” but “must be considered community property.”)

Not everything is up for grabs. Artworks created prior to the marriage and those produced after the couple has separated or filed for divorce (depending upon the jurisdiction) are not counted as marital property. Payments agreed upon before the marriage, such as for an art commission or licensing agreement, that arrive after the wedding also are excluded from the marital assets.

The first requirement for an artist in the midst of a divorce is “to develop an inventory, a detailed list of all the artworks that have been made, which were made before the marriage, which were made during the marriage, which have been sold and at what price and which haven’t been sold,” said Raoul Felder, a divorce attorney in New York City. The location of unsold pieces created during the marriage needs to be identified, and hiding artworks or failure to disclose licensing documents could be a source of future lawsuits. “Half or even 100 percent of any undisclosed and unallocated assets may be awarded to the other spouse, depending upon if the failure to disclose is determined to be the result of fraud by the nondisclosing spouse,” warned Valerie L. Patten, a family and art law practitioner in Palo Alto, California.

In addition, some value must be assigned these artworks. That evaluation might be done by a professional appraiser or even a gallery owner – a dealer may be the only source of pricing information in the event that no secondary market exists for the artist’s work. Preferably, the spouses will agree on a single appraiser or dealer to determine values, but both sides are entitled to pick their own experts, with final estimates negotiated by lawyers or by a judge in a court of law. “You want to avoid the vagaries of separate appraisals,” said Manhattan attorney Malcolm Taub, and separate appraisals also double the legal costs. However, spouses may determine their own valuations, without needing to bring in other people. Past sales, or the lack of sales, are a central part of the discussion as is a sense of realism. If an artist has had an exhibition of 20 works, and only two of them sold, for $3,000 apiece, it could be argued that the other 18 also are worth $3,000 or that those works have little to no value (or something in-between). Most states’ divorce laws are based on what is called “equitable distribution,” which refers to roughly comparable values for each partner on a marital balance sheet, and the goal of the judiciary is for the spouses to find ways to divvy up assets and property that each side finds acceptable.

More complicated is determining a value for artworks that have not been exhibited or even completed: What is the value of a clay model or maquette? When the piece is brought to a foundry, how many will be cast in an edition, and what will be the price of each? Taub stated that unfinished artworks might be assessed at some fraction of their value when completed. In these instances, the division of artistic property might be structured in terms of future earnings. The clay model in the studio may not have any value in itself but, if cast in an edition, could generate revenues in the future. “Unsold works of art have a speculative value, but it is still a value,” said Amy L. Beauchaine, a lawyer in Orlando, Florida whose practice includes both entertainment and family law. “I’ve seen agreements where an ex-spouse will be paid less than 50 percent, say 20 percent, if a work produced during a marriage is sold within three years’ time after the divorce.” Additionally, the non-artist spouse might agree to cede future earnings in exchange for being freed from responsibility for a current foundry bill, since debts accrued during the marriage also belong to both spouses.

“Judges don’t want to take away property from the person who created it,” said Gislason. They also don’t want to be in the position of assigning market value to artworks in a marital estate, recognizing that the art market may be in turmoil and that individual pieces might be sold only as conditions permit. Putting a large number of artworks on the market at one time is apt to result in lower prices and, perhaps, few or no sales, which complicates the divorce settlement and damages the artist’s market. Because of this, judges prefer artists in the midst of a divorce to devise some means of assigning values to art property that is agreeable to their spouses without the intercession of the courts. Most family law cases are settled without going to trial, leaving a judge with no further responsibility than to sign off on an agreement.

In the end, a divorcing couple is supposed to derive equal value in marital assets on a final balance sheet. Therefore, “artists need to be realistic about the value of their own work, she stated. “If the artist is inflating values, the lawyer for the spouse is likely to recommend that the artist keep it at the crazy price, and the spouse will get more on his or her side of the balance sheet.”

During a marriage, an artist may make gifts to his or her spouse of some work of art, but that gift still is part of marital property. If the spouses wishes to retain the gift, something of equal value is to go to the artist’s side of the balance sheet.

The fact of incorporating themselves as a business would not separate artists’ earnings and artwork from marital property. According to Brett Ward, a lawyer in New York City who has handled the divorces of numerous artists, performers and writers, “the court would determine the value of the corporation and require, say, half to be paid to the spouse.”

Until the property division has been settled in a divorce decree, artwork may not be loaned, sold or destroyed without the consent of the other spouse. It is unlikely that the non-artist spouse would object to sales at a gallery exhibition, since that may lead to money that can be shared, although a sell-off of one or more artworks at below established prices might be objected to for depressing the market.

Divorce negotiations are a time of considerable horse-trading. Ward noted that “more established artists generally have a wealth of other assets, such as real estate and investments, which can be traded for works of art that the artists especially want to retain, while less established artists may only have the works of art.” Emerging artists may view their artwork as more valuable than their spouses who hadn’t seen it selling and are willing to trade their interest in it for something more immediate, such as the computer or the car.

“Things I made I kept,” said painter and printmaker Janet Fish, who married and divorced painter Rackstraw Downes. “If you’re making these things, it seems that they should stay with you.” (Downes kept his own paintings after the divorce, too.) That point of view might have been a point of contention but for the fact that neither artist was experiencing sales at the time of their divorce, and dividing up their accumulation of artworks only would have been for sentimental reasons. When painter Lois Dodd divorced sculptor William King, on the other hand, he took some of her paintings and she some of his sculpture. “We didn’t argue about it,” Dodd said. “It was more like, ‘Do you like this piece?’ ‘Can I have that one of yours?’ We wanted things to be as amicable as possible.”

The value of any licensing contracts or the creation of multiples and derivative works, known as copyright, similarly is a matter of negotiation, with money changing hands as part of the divorce settlement or by an agreement to share profits after the divorce. When Charles M. Schulz, creator of the long-running “Peanuts” comic strip, divorced his wife of 24 years, he agreed to share future revenues from his work at the initial rate of 27 percent, decreasing over a 10-year period to 15 percent. Similarly, when comedian Jerry Lewis divorced his wife, Patti, after 35 years, they agreed that he would retain ownership rights to the films he had made during that time, but she would have a half-interest in the royalties from them.

With copyright, spouses may decide that one will own the physical object while the other owns the copyright (that insures an ongoing business relationship between the two), or one side might buy out the other’s copyright interests. For the artist, but just as much for the spouse – particularly if there are ongoing financial interests between the two or children who will need to be supported – the goal must be to maintain the art career with as little interruption as possible.

By Daniel Grant

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