Collecting artwork or other valuables like watches, jewelry, wine and cars is common for wealthy Illinois couples. Many individuals acquire these works because of their inherent value, personal interest and desire. At other times, a person might base their collection on aesthetics. Regardless of why people collect valuables, a divorcing couple might disagree on its worth, ownership and how to formulate and agree on a fair way to allocate it equitably.
Know the steps to protecting your valuables like artwork.
There is no doubt that divorce is life altering and collectibles like art can be of immense value, with both parties laying claim to it. While each case is unique, there are fundamental facts that might be helpful to know from the start.
From the outset, it is imperative to maintain clear records regarding the date of purchase, the amount of purchase, letters of authenticity, including the source of the monies used to purchase the valuable. The acquisition date is critical to determine the nonmarital or marital character and therefore, the allocation of the property could hinge on whether the couple purchased it before or after the marriage or if one of the spouses used nonmarital assets in its acquisition.
People who have extensive collections should:
- Track what they own along with its most recent appraisal.
- Have proof you legally purchased it.
- Retain certificates validating authenticity.
- Keep photographs of its condition.
It is not unusual for one spouse to be an avid art collector and for the other to be indifferent to the collection. Despite that, the artwork might see a significant rise in value during the marriage, so courts often use a new appraisal value when the couple owns artwork. As part of the divorce, it could be necessary to negotiate an exchange of one item for another so the person who wants to retain the valuable can do so.
Preparation is critical
Prior to some marriages the parties draft a premarital agreement under the Illinois Uniform Premarital Agreement Act (750 ILCS 10/1) to prepare for the worst-case scenario and allocate assets, both marital and nonmarital should they divorce or if one spouse predeceases the other. Those who do not have this type of agreement should be fully prepared and understand what their options are with these difficult issues.
If you and your spouse own valuables together, make a note of its purchase date and have it appraised by a reputable dealer at both retail, wholesale and liquidation value. This information should be useful during any future court proceedings.