New Jersey divorce proceedings are based on the equitable distribution of marital property. Before divorce, couples have opportunities to reach mutual agreement on the division of assets in a Matrimonial Early Settlement Panel or economic mediation. Otherwise, the couple is subject to the equitable distribution deemed in court. The proceedings become more complicated when they involve high-risk items like art collections or high-asset divorces with over $1 million in liquid assets.
Divorce and equitable distribution
Property accumulated during the marriage is subject to equitable distribution and separate property is exempt. Separate, non-marital property includes items specifically gifted to one spouse before or after marriage, items purchased by a spouse before marriage, property inherited by one spouse, or property purchased or received as a direct result of the income or efforts of one spouse before marriage. In determining equitable distribution, courts consider each spouse’s contribution to the property alongside individual liabilities, financial status, and future prospects.
Art collections and divorce
A neutral party should appraise the art collection before entering mediation or divorce. The appraisal should consider the market value, purchase price and individual stake each spouse has in each item. If only one spouse wants the collection, the appraisal may be used to calculate the amount owed for the other’s interest. Often, collection items are useful for bargaining in negotiations. The collection may also be broken up with each spouse claiming specific pieces.
If neither spouse wants the collection, the appraisal may be used to establish fair market value, sell the collection and distribute the proceeds appropriately between the separating spouses. Once the collection has been valued, a certificate of authenticity should be provided for distribution. As of February 2023, there’s a year-long backlog for divorces in NJ, while mediation negotiations could take months.