Lifecycle of a Collector: The Split

Part Two: The Prenup

WHEN COUPLES SPLIT, their accumulated assets need to be divided. So, who gets to keep what in the art collection? And is a prenup a good idea?

Whether a couple negotiates an asset split through a court before a judge, or via lawyers outside court, all deliberations are based on the presumption that in all areas of a relationship, the couple made contributions and had responsibilities within the partnership. However, as associate solicitor at Justice Family Lawyers Nectaria Grivas notes, that contribution is taken on a case by case basis by the courts.

Prenups are widely used these days in Australia to inform asset split deliberations. A prenup – or prenuptial agreement – is a legally binding financial contract between two people planning to get married, though a similar agreement can be prepared if two people are planning to live together in a de facto relationship. They can be entered into at any stage of a marriage or relationship, and even after it has ended.

“Prenups can do a number of different things,” explains family law specialist Max Meyer. “You could get a prenup and put a ring fence around an existing art collection and say whatever happens, no matter how long we’re together, I’m going to keep this collection.” More commonly, many people get together when they’re young, and the thought of a prenup seems presumptuous. Yet even here they have their use. “Say you’re 25 and all you’ve got is a couple of framed prints, but you’ve got a degree in Fine Arts from the Sorbonne. You might say, ‘sweetheart, I’m going to spend a lot of my time collecting up-and-coming young artists and I want you to agree with me that we can deal with those in a particular way’. I think it’d be pretty harsh to say to your partner that they’re not going to get any of that, but you could say if we use joint funds I’ll get two thirds of the value of it if we split, because I’ll use my extra skills as well.”

Prenups are only limited by what someone proposes and what a couple agrees to. “There’s a lot of chatter out there that prenups aren’t worth anything, but that’s absolute rubbish,” says Meyer. “They are, and the courts have said that while outcomes might be unfair, prenups [should be] fair in process: there is no deceit, undue pressure and there’s full financial disclosure between the couple. Provided those things are met, you can have a fairly high level of security from a prenup.”