Couples who decide to divorce after age 50 may have been married for a while and have acquired many things – some of them could be valuable. The rarer the item, the more likely it is to be worth something. Collections with not just sentimental but tangible value can be easy to miss, such as:
- artwork, including paintings and sculptures
- comic books
- sports memorabilia
- luxury cars
- precious metals (gold, silver)
Depending on how attached one or both spouses are to the collectibles, dividing them can build stress and lead to arguments.
If there was no pre-nuptial agreement, make a list of the non-liquid assets acquired during and before marriage, the price paid for them or whether they were a gift, and their current value, if known.
Try to reach an agreement over which property each spouse wants to keep or whether they want to sell everything and share the proceeds. Then, get a fair market valuation, which will show how much the collection can sell for during current economic conditions. If the items are rare or sought after, they may fetch more than the fair market value. But, not every collection is profitable. For example, unless they have unique properties, antique bottles may have more nostalgic than financial value. If the items have decreased in value over time, the couple could face a loss on them.
In the process, get any certificates of authenticity and receipts as proof; they should also show when the spouses bought the collectibles and help in the valuation. Connect your clients with a qualified appraiser who deals in the same or similar assets to determine if they gained value from the time of purchase to the present.
Separate vs. Marital Property and the Law
If the couple can’t agree on how to divide the collection, the state court can decide for them. Many states, whether they follow equitable or community property statues, have clear laws for division. Generally speaking, assets acquired during a marriage are often considered marital property. In that case, you must assess the length of the marriage and when it’s considered to be over, whether it’s from the date of separation or divorce.
Family law attorneys often focus on the common assets couples own, such as vehicles, houses, or boats, but it’s easy to overlook and to misunderstand collectibles during property division.
Our CFL course details the subtle aspects of asset division. In-depth knowledge of these and other financial principles in divorce makes you a better consultant and a more skilled attorney for your clients. Learn more about how the training can elevate your practice in our free information packet.
Also, don’t miss the next part of our financial literacy series, which will cover how to divide military benefits and the potential tax issues involved.