When a divorcing couple in Colorado faces the issue of dividing their property, listing and valuing all the assets can seem like a monumental task. In high asset divorce cases, the task of property division can be exponentially larger.
When a retired software executive and professional sports franchise owner in Seattle split from his wife, a committed philanthropist, one of the most challenging tasks the couple faced was dividing up their art collection. Valued at about $102 million, the collection included paintings and sculpture by Claude Monet, Pierre-August Renoir, John Singer Sargent and Albert Bierstadt.
Selling the artwork and splitting the proceeds was not a realistic option. For tax purposes, an artwork’s appreciation in value during the time it was held by the seller is taxed at 28 percent. This is significantly higher than the rate for most assets. And you can’t just sell world-famous paintings on eBay. The couple would have had to pay significant fees to auction houses and dealers.
The judge asked the parties to help him out. At the judge’s request, both spouses put in writing which paintings they wanted and why. The wife wrote about the sentimental value of some of the artworks. The husband took a more businesslike approach — in part because he needed the art collection to secure a line of credit with the bank. Ultimately, the couple agreed on a division they could both live with.
Most divorcing couples in Colorado don’t have to deal with the complex valuation and tax issues involved with a multimillion dollar art collection. But valuing and dividing assets can still be a complex and emotionally draining process.
In Colorado, the court will seek to divide marital property equitably — which does not necessarily mean equally. Separate property — assets each spouse brought to the marriage, or acquired through inheritance or gifts — stays separate and is kept by each spouse. But the appreciation in value of separate property is considered marital property. An experienced divorce lawyer can help a spouse get the fair share of marital property they are entitled to under the law.
Source: Seattle Times, “The art of divorce: She gets the Monet, he gets the Renoir,” Ken Armstrong, July 28, 2012