Divorce is a complex process that necessarily involves the division of marital property, which can be a contentious issue. This is especially the case when it comes to unique assets like art and collectibles.
Some collections of art or collectibles have a high dollar value, but for many collections, the value is derived from the meaning these items have in the owner’s eyes. Regardless, in New Jersey, the division of these assets can be particularly challenging due to the state’s equitable distribution laws.
New Jersey’s Equitable Distribution Laws
Under New Jersey law, marital property is divided equitably, which means it is distributed in a way that is fair but not necessarily equal. This includes all assets acquired during the marriage, regardless of whose name is on the title, who arranged for the purchase of the property, or who the property meant the most to.
Therefore, art and collectibles acquired during the marriage are subject to division. However, the division of these unique assets can be complicated due to their subjective value and emotional significance.
How to Value Art and Collectibles
The first step in dividing art and collectibles is to determine their value. This can be a complex process as the value of art and collectibles can fluctuate based on market trends, the reputation of the artist, and the condition of the item. It is often necessary to hire a professional appraiser who specializes in the type of art or collectible to provide an accurate valuation.
Once the value is determined, the next step is to decide how to divide these assets. There are several options available. One option is for one spouse to buy out the other spouse’s interest in the asset. This is often the preferred option when one spouse has a particular attachment to the item or when the item cannot be physically divided.
Another option is to sell the asset and divide the proceeds. This is often the best option when neither spouse wants to keep the item or when the value of the item is so high that it would be financially impractical for one spouse to buy out the other’s interest.
In some cases, the spouses may agree to continue co-owning the asset after the divorce. This is often the case with high-value items that are expected to appreciate over time. However, this option requires a high level of trust and cooperation between the ex-spouses and may not be feasible in contentious divorces.
Could I Face Potential Tax Implications?
It’s important to note that the division of art and collectibles can have significant tax implications. For example, if an asset is sold, the spouses may have to pay capital gains tax on the increase in value since the asset was acquired.
Therefore, it’s crucial to consult with an before making any decisions.
What if Spouses Cannot Agree on How a Collection Should Be Handled?
If the spouses cannot agree on how to divide their art and collectibles, the court will make the decision for them. The court will consider several factors, including the length of the marriage, the contribution of each spouse to the acquisition of the asset, and the financial needs and resources of each spouse.
Of course, most divorcing couples prefer to avoid this option, as it can add to the length and cost of a divorce which, in turn, can make for a much more stressful situation.
Seek the Advice of an Experienced New Jersey Divorce Lawyer
The division of art and collectibles in a New Jersey divorce is a complex process that requires careful consideration and professional advice. If you are going through a divorce and have art or collectibles, it’s crucial to consult with an experienced New Jersey divorce attorney at Rigden, Lieberman & Mignogna, P.A.
Our team of family law attorneys have decades of experience guiding clients through the divorce process and protecting their interests at every step of the way.
