The division of marital assets is one of the top priorities in a divorce. Whether you or your former spouse decide to sell the marital home or any personal assets you two may own, you will first need to establish a fair market value. Many divorce proceedings require the appraisal of personal assets to assist in arriving at a fair division. Many are familiar with the procedures for property appraisals but are unfamiliar with having personal assets such as jewelry, memorabilia, and anything else of significant value appraised for a divorce. Some investments, such as valuable artwork, may pose unique challenges in the divorce process. If you and your spouse have complex assets to value in divorce, it’s vital to hire a professional appraiser to find the fair market values of these items.
According to Investopedia, the appraisal approach is the process of estimating an asset’s value based on factors such as its cost, the income it generates, and its fair market value compared to that of similar assets. When you divorce, an appraisal of the property owned by one or both spouses is usually required to determine the property’s value for negotiation in the divorce settlement. Generally, the value of an asset is determined by the date of separation. Although California law provides that the assets shall be valued as close to trial as practicable, a substantial period often transpires from the date of separation to the date of trial. In some instances, the asset’s value may increase or decrease between the date of separation and the date of trial. Assets such as bank accounts, 401(k)s, and other deposit accounts are easily calculated using account statements. The statement that most closely approximates the date of separation or trial, as appropriate, establishes the value for those accounts.
In some instances, such as in high net-worth divorces, artwork, antiques, and collectibles can be a significant portion of a marital estate. The value of those items is subject to equitable division during divorce. According to the Art Business Journal article, one of the first steps is to develop an inventory of all the artwork collected and sold during the marriage. When there is expensive artwork at stake, it is necessary to appraise it by hiring a qualified art appraiser to evaluate the market against the artist’s sales history and the probability that it will continue to rise. Once the appraiser assigns a value to each art piece, it will be easier to decide how much each person should receive.
You’ll want to appraise the worth and value of jewelry before dividing marital assets. Jewelry received as a gift post marriage can be considered marital property, depending on the circumstances surrounding the gift. Because jewelry is considered community property, both parties have a right to a portion of its value. However, some jewelry, such as engagement rings, are usually not considered part of marital assets and are instead classified as separate property.
A 2020 Forbes report warned divorcing couples that not all appraisal values are indicators for actual worth. An appraisal coming from a retail jewelry store is only a valuation used by insurance companies to base their jewelry premiums, not what you could get if you sold it yourself. In some cases, the appraisal can be a bit higher than the ring’s purchase price, but that’s to protect the insurer, not to ensure you get a higher price.
When it comes to appraising personal assets in a divorce, the most crucial factor is the appointment of a professional and experienced appraiser who knows both the items they are appraising and the proper methodology. Negotiating a fair divorce property settlement is complicated, and it can be difficult. You want your divorce settlement to be determined based on accurate and up-to-date information. In that case, the best possible outcome will depend on having a qualified appraiser to play a critical role in your divorce process.
Our experienced family law attorneys service Sonoma County and other areas of California. At Schoenberg Family Law Group we can help clients establish priorities, choose their battles, and secure their fair share of the estate, so they will emerge from the divorce in the most beneficial financial position. We focus exclusively on family law, specializing in high-conflict, high-stakes cases involving professionals and spouses of high-net-worth individuals.
By Debra Schoenberg