Personal Property: Division & Valuation
The allocation of personal property is one of the last issues any Judge or attorney wants to address. There have been numerous cases in which the parties have expended tens of thousands of dollars arguing over items such as Tupperware. Most clients understand the financial and emotional costs of litigation and that it makes sense to attempt to divide the marital personal property by agreement with their spouse without involving the attorneys and the court. Sometimes party do this between themselves, and other times they may involve third party neutrals such as appraisers or mediators.
There are various methods parties may utilize to divide personal property. One method is to have parties make several lists. The first list is an inventory of the property to be divided. After reviewing the inventory, each party makes a list of the items they would like to keep. This often results in the parties discovering that there are many items that are on one party’s list that are not on the other’s list. There is usually also the discovery that there are many items that are not wanted by either party. In those cases parties have had estate and/or yard sales and divided the proceeds. Items that don’t sell can be donated. When there are items that both parties wish to keep, a good method to allocate the property is the “pick and choose” approach. The parties flip a coin to determine which party will pick first. Once that party makes their first choice the parties alternate selecting items.
Sometimes, there are items of personal property that have significant value such as wine, guns, stamps, baseball cards and/or other type collections or antiques or artwork. In those circumstances it is wise to have the property appraised. Once values are assigned to these types of assets an equitable divisions can be done. Some parties have divided these items by the pick and choose approach discussed above. Others have conducted an “auction” of the items. If one party retains more of these items than the other the difference in value may be offset by a cash payment. Recently, we had a client who stated she was going to let her husband take all the guns because she never liked having guns in her house. We advised her to inventory and appraise the guns before she agreed to give them away. They appraised for over $10,000 and, as a result, we secured for her additional cash in the settlement.
Finally, there are always items that potentially both parties can have by duplicating or purchasing a second version, such as pictures that can be copied. Once, we had a matter where the parties had divided everything except a book. Neither party would concede giving this “special” book to the other. A quick search online find the exact same version of the book for $15 and the issue was creatively and expeditiously resolved.
At Katz & Stefani we advise our clients about the types of assets and methods for allocating them in an effort to make the process efficient, productive, and as painless as possible. We advise our clients on the cost versus benefit of having a judge divide assets or finding an alternative method of dividing property which limits the financial burdens and emotional issues that arise in property divisions.