Charles and Thomas Danziger are the lead partners in the New York firm Danziger, Danziger & Muro, specializing in art law. Visit their website www.danziger.com.

Roy Lichtenstein Jim Dine Robert Indiana Auction to Coincide with Art Basel Miami Beach No Bailout at Christie’s Sunk Costs at Sotheby’s Contemporary Sale Harvard Receives Generous Pulitzer Donation Andy Goes to China

Send a letter to the Editor

Save to Del.icio.us Digg this

A week after her e-mail, Misty and her soon-to-be ex, Andre, came in to discuss how splitting up would affect their extensive art collection. We know just enough matrimonial law to be dangerous—divorce, the saying goes, is a lawsuit to determine who gets custody of the money—so we advised them to bring along separate divorce attorneys and we would help mediate.

In New York and most other U.S. states, the general rule is well settled: Items acquired during a marriage (“marital property”) are distributed equitably between spouses, whereas those acquired before marriage or through gift or inheritance (“separate property”) generally remain separate. When it comes to property like art, however, the application of this rule isn’t always so straightforward.

In our case, Andre began the meeting on a slightly antagonistic note, calling his wife a scheming witch and declaring that all appreciation on their collection was marital property. One painting in particular—a Roy Lichtenstein image of two lovers that Misty had bought years before their marriage—had increased in value by $1 million, and Andre wanted half of that increase, in cash. Misty’s attorney objected. The painting was clearly separate property, he said, and since the appreciation in value was “passive,” meaning it was achieved without any action by the spouses, it should go to the titled owner—here, the wife.

Andre’s lawyer fired back with the seminal 1986 case Price v. Price, in which the New York Court of Appeals held that “where separate property of one spouse has appreciated during the marriage . . . ‘due in part’ to the contributions or efforts of the nontitled spouse as parent and homemaker, the amount of that appreciation should be added to the sum of marital property for equitable distribution.” The attorney argued that Andre had made important “contributions and efforts” in having advised his wife not to sell the painting too soon.

According to New York divorce attorney Allan D. Mantel, a judge weighing the Lichtenstein in question would likely consider factors such as “the expertise and training of the advising spouse; whether buying, selling or collecting art was a regular activity of the parties; and the manner by which the art was acquired”—for example, whether it was inherited or purchased with separate assets.

After much bickering, the two matrimonial attorneys left the issue of the Lichtenstein unresolved, and we then discussed an iconic Jim Dine heart painting purchased at Christie’s during the couple’s honeymoon in Europe. Misty wanted the heart (“since Andre has no brain”) and reminded her husband that she had bought it in her own name with funds from her own bank account. Andre’s lawyer balked, saying his client had accompanied Misty to the auction and that it was thanks to his “great eye” that she made the purchase at all. Misty reluctantly agreed to sell the picture and share the proceeds.

Next, the couple turned their attention to a Robert Indiana “love” sculpture. Andre claimed that it was his alone because he had just received it as a birthday present from his father-in-law. “Not so fast,” responded Misty’s lawyer. (“You can’t hurry love,” we hummed.) While conceding that items obtained by gift from someone other than the spouse are separate property, he shrewdly requested proof that the sculpture was in fact a gift. New York law presumes that everything acquired during marriage is marital property, and anything separate must be proved as such. Luckily for Andre, he had compelling evidence—a birthday card—that the work was indeed a present. As for the Schiele nude that Misty had given him for their first anniversary, this would be considered marital property, even though it was purchased with her money.