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2012: How, in a Divorce or Legal Separation in San Diego, are Objects of Art, Collectibles and Antiques Valued for Division Purposes?

In a divorce or legal separation in San Diego Superior Courts, the issues of valuation is always present when there is a division of assets and debts. In many cases, the spouses themselves will agree on a value for the legal separation or divorce. What, however, is the procedure when the spouses cannot agree?

Assets, whether antiques, art objects or collectibles, will be divided using the “fair market value” in the San Diego Court Houses. The family law court houses, in San Diego county, are located in downtown San Diego, El Cajon, Vista and Chula Vista. When a divorce or legal separation is filed, a case number is assigned and this case number will remain the same during the entire legal separation or divorce. Within the issues of the divorce or legal separation, there may be issues regarding valuation of assets. The definition of fair market value, for divorce or legal separation purposes, is the amount that would be obtained if the asset were sold under normal circumstances to a bona fide third party purchaser. Of course, the spouse keeping the asset would like to have it valued as low as possible and the spouse not keeping the asset would like to have it valued as high as possible. If there is a disagreement, a Judge may order the sale to a bona fide third party purchaser and this will determine the value for the division.

If the spouses cannot agree on a value then, many times, an expert appraiser is required. Due to the costs of the appraiser, it is important not to exceed the fair market value of the asset in the valuation itself. In addition, for collectibles, antiques and art objects if the seller is a company, there may be a substantial commission. It may not be practical to have a sale by one of the spouses to a private third party for many reasons. The fair market value, of course, is not what the purchase price was. For example, for furniture, the purchase price may be deflated by up to 90% of the original purchase price and given a “wholesale” or “fire sale” value for division purposes in the divorce or legal separation. If an appraiser is not hired, then an opinion of a business owner who sells or trades in antiques, collectibles or art objects can be consulted. It is very important to reach an agreement on who will value since you do not want to choose a person or company, have your spouse choose another person or company and then have to have a third {neutral} person review the other two valuations and then make a decision. If an appraiser is used to value, then it is important to make sure that the value used is the value in which the asset can be sold in a reasonable time and not the replacement value or insurance value which is often much higher.

One approach could be to hold an “auction” between the spouses. In this way, each spouse “bids” for the item and this can place their fair market value on the asset. Of course, rules have to be established so that it is equitable and so that the spouse with more financial resources cannot “outbid” the other spouse. There are, of course, many other approaches.

If you are in a divorce or legal separation in San Diego and are seeking an attorney, please feel free to contact us to meet and discuss your legal matter.

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