Collectors often put a lot of time and money into building a collection, whether it’s a collection of action figures, historical memorabilia or classic cars. Some people have been maintained collections for generations.
As such, dividing collections in a divorce can be a particularly painful and complicated process. If you are nervous about this, it can be helpful to know what can happen to collections in divorce.
Collections: Separate or marital property?
One of the most important steps in addressing a collection is determining if it even has to be divided in the first place.
Broadly, all property acquired during a marriage is community property, per property division laws in Texas. As such, if you started or added to your collection during your marriage, it could be community property.
However, if you owned your collection before getting married or inherited it, it could be separate property, which is not eligible for division. Addressing collectibles in a prenuptial agreement and identifying it as separate property can also shield it from division.
Things can become more complicated if you earned an income with your collection, or it increased in value during your marriage. Under these circumstances, the profits could be community property.
Protecting the collection
If the collection is eligible for division, you will need to determine if you should separate it into pieces or not.
Often, part of a collection’s value stems from keeping it intact. Dividing it between two people can, therefore, decrease the value. To determine whether you should distribute it, you should have it valued by a professional who can assess how much the collection is worth as a whole, as well as the individual pieces.
Depending on this information, you can decide whether one person will keep the collection, or you will each receive pieces of it. This will typically require parties to negotiate so that division of assets remains equal.
Considering the financial and emotional elements of this process, parties typically prefer to address the division of property themselves outside of court. That said, if parties cannot agree, the courts will make a decision.
Dividing collectibles can be a point of contention for divorcing spouses. Knowing what to expect from the process can make it easier to understand your options and what you can do to preserve this unique type of property.