Valuing Artwork And Collectibles For Your Divorce
When a couple gets divorced, the division of marital property can be stressful and complicated. Because Iowa is not a community property state but instead one that uses equitable distribution in divorce matters, it can be even more difficult for couples who have antiques, coin collections, rare pieces of art, and other items of substantial value. Those with questions or concerns about valuing artwork and collectibles for your divorce may want to consider scheduling a consultation with the experienced Iowa family law attorneys at Simpson Legal Group, LLC at 712-256-9899.
In community property states, property is generally divided equally between spouses in a divorce. Many people are unclear when it comes to equitable distribution, which essentially means dividing property in a way that is equitable or “fair.”
According to The Iowa State Bar Association the court will divide the property of both spouses regardless of whether the property was attained prior to or after the marriage other than inheritances or gifts received by either spouse. There are certain factors that courts use to determine the division of property which include, but are not limited to:
- The length of a marriage
- Each spouse’s age and emotional/physical health
- Each spouse’s vocational skills
- Any marital or premarital settlement agreement
- Contributions of one spouse to the education, training, or expanded earning potential of the other
- The time and cost essential to obtaining skills and training for one spouse to become self-sufficient
It is important to note that equitable division does not mean equal division.
Common Types of Collectibles Requiring Valuation
Many people are passionate about their collectibles not only for their monetary value, but sentimental value as well. Some of the most common types of collectibles often divided in a divorce include:
- Music memorabilia
- Original video game collectibles
- Collectible dolls
- Comic books
- China and other decorative plates
- Sports memorabilia
- Movie collectibles
- Trading cards
- Antique and vintage toys
While this is not an all-inclusive list, these are some of the most common collectibles couples may have that are subject to division in a divorce.
Take Inventory of Artwork and Collectibles
Prior to valuing artwork and collectibles for your divorce it is important to take inventory. This can be done by making a list and taking photos of any artwork or collectibles that have been acquired either prior to or during the marriage. Once the list is complete, both spouses should review it to make certain no items have been left out. When inventorying items be sure to include:
- Each item’s cost
- When to artwork or collectibles were purchased
- Which spouse purchased each item
Collectibles and artwork acquired prior to marriage remain the property of the spouse who purchased them. Family heirlooms, inheritances, and gifts are considered separate property and therefore are not divided in a divorce. Simpson Legal Group, LLC is available to provide guidance on divorce matters.
Things to Keep in Mind When Valuing Artwork or Collectibles
There are certain things those with valuable collectibles or artwork should consider when trying to determine the value of their items. Some spouses agree to divide the items equally or sell them and split the proceeds. Many spouses do not want to take this approach for various reasons.
Do Not Rely on the Insurance Company for Determining Value
Insurance companies to not focus on the fair market value of artwork or collectibles, but instead on the replacement value. This can provide a clue to the value but is not the solution.
Consider Using a Valuation Index
Companies are available that continuously track the value of common collectibles such as trading cards, wine, Star Wars memorabilia, and other items. These companies can provide you with an estimate, although you do not have to accept it.
Consider the Taxes
A collection that has been held in someone’s possession for a year or more will typically be subject to a 28% capital gains tax rate when sold according to the Internal Revenue Service (IRS).
Consider Using a Certified Appraiser
An appraiser takes several things into consideration when appraising artwork and collectibles including the initial cost, quality of items, and what similar collections have recently sold for. When possible, use an appraiser who specializes in the type of items or collections you have.
As collections or artwork are divided, keep volatility in mind. A collection’s final value may be impacted by a economic downturn, demand, rarity, and other factors. It is a good idea to obtain an initial valuation and agree to a final valuation as the divorce finalization grows nearer.
Are Your Collectibles Insured?
The value of a collection may be conjectural if it is not insured or was not possible to get insured. Again, insurance valuations should not be considered a final number, as providers valuations of collectibles and artwork are based on replacement value.
Dividing Artwork and Collectibles in a Divorce
When couples who are divorcing decide it may be best to divide collectibles, there are several ways it can be done. These include:
- Selling the collectibles/artwork and dividing the proceeds
- Spouses negotiate a trade (for instance, one spouse keeps the antique coin collection and the other keeps the sports memorabilia), or one spouse buys the other out
- Equal division of the collection (both spouses divide the wine collection, trading cards, artwork, etc.)
This will generally require a certified appraiser who can assign a fair market value to ensure both spouses are treated equally in terms of value of the collectibles and artwork.
Consider Visiting with Simpson Legal Group, LLC
Artwork and collectibles are often collected over the course of a marriage, although both spouses can bring high-value items obtained before they married into the marriage. Either way, valuing artwork and collectibles for your divorce can be difficult and even contentious in some cases, causing additional strife between spouses. Most divorces are not easy to begin with, and high-value collectibles make the process even more difficult and complicated. Those in need of legal guidance are invited to reach out to an experienced Iowa divorce attorney with Simpson Legal Group, LLC at 712-256-9899.