If you are considering divorce, you may have questions about what will happen to property you have spent years acquiring. While many people focus on homes, retirement accounts and investment portfolios, personal collections can also represent a substantial share of a marital estate.
Whether you own artwork, rare watches, classic cars or other collectibles, these items can create unique challenges during divorce. Their value may not be easy to determine, and disagreements can arise over ownership, value and division.
Why collections and luxury assets can create challenges
Some assets are easier to divide than others. A checking account has a clear balance, but a collection may not have a clear value. Assets that frequently become part of divorce disputes include:
- Fine art and antiques
- Jewelry and luxury watches
- Classic and collectible vehicles
- Rare coins and currency collections
- Wine collections
- Sports memorabilia
- Designer handbags and luxury goods
You and your spouse may have different views about what these items are worth. A classic car, rare watch or piece of artwork may gain or lose value over time. Personal attachment to an item can also make negotiations more difficult.
Determining whether an asset is marital property
If you own a collection, one of the first questions will be whether it is part of the marital estate. In New Jersey, courts generally divide marital property through equitable distribution. Property acquired during the marriage will usually qualify as marital property, while some gifts, inheritances and premarital assets may remain separate property.
How and when you acquired an item can affect how a court classifies it. For example, you may have started a collection before marriage but continued to expand it during the marriage. Receipts and financial records can help establish the history of an asset.
How collections may be divided
When a divorce involves valuable collections, several outcomes are possible. The approach will depend on the type and value of the asset and the overall makeup of the marital estate. Common approaches include:
- Awarding an asset to one spouse and offsetting its value with other property
- Dividing items within a collection
- Selling the asset and splitting the proceeds
- Including the asset in a broader property settlement
A solution that works for a wine collection may not make sense for valuable artwork or a collection of classic vehicles. Each asset brings its own considerations.
What determines who keeps a collection?
When a divorce involves valuable collections, the question is usually not whether a spouse will keep a particular item. The larger question is how that item fits into the division of the couple’s property as a whole.
As a result, there is no single answer to who gets the art, jewelry or collectibles. One spouse may keep a collection while the other receives different assets of comparable value. In other cases, spouses may divide the collection itself or agree to sell it. If valuable collections are involved, details about their history and value can play a larger role in the division of assets.
