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North Carolina artists' artwork is an asset in divorce

In North Carolina, all assets and property of value are considered marital property in divorce proceedings. For artists such as painters, writers and sculptors, this includes rights to their work, including copyright and residual income from licensing. However, in most cases, this does not include works created before the marriage began or after legal separation was filed, nor does it include contracts and royalty payment plans entered into before the marriage.

When entering divorce proceedings, an artist should begin by identifying all works created, including which pieces have and have not sold, the location of any unsold pieces and all royalty and contract agreements entered into during the marriage. This gives the attorney a clear picture of the marital estate and helps prevent accusations of fraud or lawsuits by the spouse later, as well as possible loss of financial rights to undisclosed works.

The value of artwork need not be purely financial. While artists with a following and reputation may be able to readily assign value to their works, some may not. This is known as "speculative value," and it is a crucial part of determining marital assets. However, some agreements will permit an artist to offer other holdings, such as investments or real estate, to their spouse in lieu of ongoing interest in the sale of the work.

When an artist begins the divorce process, a family law attorney might start with the inventory of works and initiate appraisal of them from a dealer or gallery. Once the actual and speculative values have been established, the attorney may draw up an agreement that divides the marital assets, including the work, equitably. Should the settlement be rejected, the attorney could proceed to court and argue for the client's interest in the work.

Source: The Huffington Post, "For Artists, Divorce Means Splitting Up the (Art) Assets," Daniel Grant, March 3, 2015

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