Everything has a value in divorce, but calculating how much certain assets are worth and who they should belong to is often far from straightforward.
Clients typically rely on their lawyer, financial adviser or estate agent to value property and possessions, but when collections or collectors’ items form part of the package then specialist knowledge is usually required.
Fine art, antiques, classic cars, jewellery, and designer handbags are just a few examples. Often amassed for personal reasons and over a number of years, such items tend to hold great sentimental value, so it is imperative to get the right advice.
Collections are typically disposed of in one of the following ways. A person who wishes to keep their collection together may, if financially able and both sides are in agreement, choose to offset the value against other available assets and effectively buy out the other party.
Couples may choose to divide the collection between themselves, and I have seen situations where this has happened, even where a coin has been tossed to decide who should pick first.
The third option is for the item or items to be appraised by an expert and assigned a fair market value then sold and the proceeds equally shared.
Valuations
If acquired during the course of the marriage or civil partnership and without a pre-nuptial or post-nuptial agreement in place, collections or collectors’ items will typically be classed as matrimonial assets that must be valued in order that both parties may be compensated fairly.
In divorces involving the division of high-value collectibles, I advise clients to instruct professional, reputable valuers such as the auction houses of Bonhams or Sotheby’s. Both are long-established experts in their field and can be relied upon to deliver a fair, independent and confidential assessment.
They will also produce a report that authenticates their findings, usually delivered within 21 days.
There is, of course, a fee for this, depending on what it is that is being valued, which can range from single items to extensive collections. The nature of collectibles is that they are likely to appreciate or depreciate in value in the future, but as a general rule experts will assess them based on their market value at the time of the divorce.
Parties can choose to appoint their own valuers, but often couples will agree to a single joint expert who is given strict instructions on what is required in a letter of instruction, approved and signed by the lawyers on both sides.
Challenges are uncommon but, if an agreement cannot be reached on the value of a particular asset or assets, experts can be appointed by the court and may also be called to court to present their findings.
Couples who struggle to reach an agreement may wish to consider financial dispute resolution, although with court delays, those who can afford to would be wise to choose the private financial dispute resolution option.
