January 14, 2010 (Original publish date) • By Dennis Beaver
Part 2
Last week we began a look at the often frustrating task of figuring out how much the “stuff” a couple has acquired during their marriage is worth and how it should be divided in a divorce.
“Even in a relatively simple divorce, merely saying that everything will be 50-50 is only a beginning,” maintain Aleza Tadri and Charles Rosoff, both accredited Members of the American Society of Appraisers.
“Gold or jewelry can easily be sold within an hour or two, but if you are trying to get top dollar for your house or furniture, this could take weeks or months, running up legal fees, storage charges, and lost time,” they point out.
And with that as our jumping off point, these two appraisers who routinely deal with multi-million dollar divorces offered a number of practical tips acquired over their years in the business of placing a “value on stuff,” as Aleza describes the role of an appraiser.
It is not usually worth what you paid for it
Within days of a birthday or the holiday season — after the family has splurged on expensive electronics or other “big kid” toys, it’s obvious the marriage has ended. Soon will come the job of determining who gets what, and how to divide things as equally as possible.
Charles used the following illustration to make a point about easy to make mistakes in the valuation process:
“One common error couples make is to assume that if something is purchased recently, then its purchase price is its fair market value and that’s what they should receive. But it is now used, and they might have paid an inflated price. People who purchase high end home electronics or business equipment, will generally never recover anywhere near what they paid for it, especially if they were “early adopters.”
A good example is a plasma television purchased for $20,000 just a couple of years ago, worth no more than a new plasma selling for fraction of that cost today.”
I posed this question: “A couple has a 40-inch LCD TV they want to sell, or assign some value to it. Why not just go online, look at eBay or Google the item to come up with a price by clicking on asking prices or sales?”
Both appraisers at once pointed out risks of doing that:
“You need to look at several completed sales. Be sure what you are researching is identical to what you have and that the sales are for items that are identical or comparable to what you have.”
Got collectibles? Reach for the Kleenex
One of my clients has been collecting antique French porcelain dolls and another baseball cards since he was in junior high school. Both are in their 60s and divorcing. Each has thousands of dollars invested in these “collectibles,” and is discovering that what they thought their collections were worth is far less than what anyone is willing to offer them.
They always thought these items could only go up in value. What happened?
“Something indeed has happened to the value of collectibles. From comic books to Lladro figurines, baseball cards and other collectibles — if initially purchased at full retail — they might only be able to be sold for a fraction of what was paid to buy them. Blame it on the Internet — in part — as suddenly a great supply has been thrown into the market and prices have fallen dramatically. Also, a lot of collectibles have fallen out of favor,” Charles explained.
“A good example,” he added, “would be some very expensive collectibles, such as Picasso ceramics, worth $30,000 20 years ago, but today might bring no more than $3,000.”
“But not everything is being sold at fire-sale prices. Let’s say you have a collection of Barbie dolls, childhood toy collections, baseball cards, or collectible guns. When we have such items in mint condition — sometimes in the original packaging — they can still fetch a lot money,” he noted.
And, from a legal perspective, if these were brought into the marriage — something owned before you got married — then it’s probably not community property, but your own, separate property,” the appraisers were quick to point out.
When to get outside help
In a divorce, there is a natural tendency for one side to want a high price and the other, a much lower price. This is where a qualified appraiser can be a real helping hand, working in a completely neutral way, with access to far more sale and price data than most individuals or their attorneys.
The American Society of Appraisers has a highly informative Web site worth looking at for anyone needing help in finding an answer to the question: “How much is that worth?”
It’s at www.appraisers.org
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.