How Do You Divide Jewelry, Antiques and Collectibles in a California Divorce?

The rules regarding division of jewelry, antiques and collectibles are complex

A spouse may become emotionally attached to jewelry. Spouses may attach significantly different values to antiques and collectibles. When spouses divorce, how do they reconcile these disputes?

In this article we will discuss division of jewelry, antiques and collectibles in a California divorce. What we write here applies to community property assets, and not separate property. Division of jewelry, antiques and collectibles that are separate property is easy. The spouse who owns that asset receives that asset.

How do you value jewelry, antiques and collectibles in a California divorce?

A non-expert (called a "lay" person in the law) cannot value these items. A spouse may have an opinion about the value of jewelry or a piece of antique, but that opinion may not matter much to a judge. Sentimental value is irrelevant.

A valuation of jewelry, antiques and collectible items requires expertise. That expertise usually means one or both spouses higher an appraiser.

An appraiser may be a spouse's expert or a mutual expert

Most of the time, spouses will hire a mutual expert as the appraiser. This especially makes sense when the value of these items is not significant (more than $100,000 for example). If the value is significant, each spouse may hire his or her own appraiser.

Spouses may need different appraisers for different items. For example, appraising a diamond necklace may require a different expertise than appraising an antique desk. It is possible a person may have a dual expertise in both of these items, but that is the exception and not the rule.

Do spouses need an appraiser for every jewelry, antique or collectible?

If you and your spouse agree to the value, there is no need for an appraisal. However, if you are unsure about the value, you should obtain an expert's opinion as these items could hold significant value.

How do spouses divide jewelry, antiques and collectibles?

Once you know the value of the assets, you will need to determine how to divide the jewelry, antiques and collectibles.

One spouse may have a certain use or attachment to an asset. If so, the spouses may agree to award the asset to that spouse with an equalization (one half of the community property value) to the other spouse. For instance, if a spouse receives an antique with a current value of $10,000, the other spouse is entitled to an equalization payment of $5,000 to make the division in accordance with California community property laws. All of this assumes the asset the spouses divide is 100 percent community property.

If neither spouse wants the asset, the spouses can agree to sell it and equally divide the net sale proceeds.

Before you do this, you should have a written agreement with your spouse and confirmation regarding the sale and division of the sale proceeds. Pursuant to the Standard Family Law Restraining Orders, when a divorce case is pending, you and your spouse cannot sell assets without approval from the other or a court order.

You are also under a separate duty to keep your spouse informed of sales of assets or disposing of assets.

If the spouses agree to sell the assets and one spouse is assigned the duty to handle the transaction, that spouse has a duty to sell the asset in good faith. That spouse cannot sell an asset for $500 when its current value is $5,000. This breach of fiduciary duty often occurs when one spouse sells the asset to a friend or family member for little value.

There are special rules for division of jewelry

For jewelry, there is a gift transmutation exception pursuant to Family Code Section 852(c). Here is what that means.

Normally when something is of substantial value, to change the character from community property to separate property, you need clear written documentation to make this change in character (called a transmutation). However, California law states jewelry that is not of substantial value does not need a written instrument to change the character. What is substantial value? That depends on the size of the estate. Substantial value has a different meaning in an estate worth $500,000 versus one worth $15 million.

Therefore, when one spouse gifts jewelry to the other spouse, it is typically considered the receiving spouse's separate property if it is not of substantial value.

There may be circumstances in which jewelry is acquired during the marriage and it was not a gift. In those cases, a normal division will need to take place and possible equalization payment be made to make a reasonable and equal division of the property.

Do not try to handle division of jewelry, antiques and collectibles on your own

You need advice from an experienced divorce attorney. Shortcuts are dangerous if these items are of substantial value and you want to ensure a proper division.

Our family law firm has offices throughout Southern California. Please contact us for an affordable strategy session.