Most people who choose divorce mediation are more easy-going than those who decide to fight over every single personal possession in divorce court. This is almost always a good thing. Being easy-going tends to make divorce less stressful, cheaper, and faster. It is important, however, not to let yourself become so laissez faire that you end up giving away the store.
High Value Personal Property in Mediation
If you are in the middle of figuring out accurate values for things like your home, business, investment portfolio or retirement account, you might feel that personal items, like your own clothing and accessories, are not worth haggling over. In most cases this is true, but not in every case. It may be fine to lump such belongings together in your Marital Settlement Agreement. Before doing so, however, make sure you are clear about what this would include.
In some cases, failing to separately inventory clothing and accessories could mean losing a big chunk of cash. This is not only true for obviously pricey items like jewelry. Things like designer clothing, shoes, or handbags may also need to be separately assessed. Other potentially valuable items sometimes lumped in with personal items include hobby accessories, like musical instruments or sports equipment. Memorabilia or personal collections, such as coins, stamps, books, comic books or vinyl records, can also have hidden high value.
For an idea of how much money this could involve, just take a look at this list of the priciest designer handbags, or this article on appreciation of such items during the pandemic. Granted, very few people will find themselves in these rarified categories. Still, divorce budgets tend to be tight, so even a few hundred dollars might make a difference.
Who Really Owns Personal Items in Divorce?
The general rule in New Jersey is that property belonging to one spouse before marriage, or property one spouse acquires during marriage as an inheritance or a separate gift from a third party, is separate property. All other property acquired during marriage, including gifts from one spouse to the other, is marital property, unless one spouse purchased the item with separate funds. A court will not divide separate property in divorce unless it is commingled (mixed in a way that cannot be disentangled) with marital property. NJSA 2A:34-23(h). The burden of proving that something is separate property, however, is on the person making the claim. Painter v. Painter, 65 N.J. 196, 214 (1974).
Under this rule, most items you purchased for yourselves or gave each other during marriage would belong to both of you. The only exception would be if one of you used your own separate property for the purchase. If you have kept your separate property separate, it is still yours. But if you sold your rare book collection for $10,000 and then put that money into your joint checking account? That is commingling.
New Jersey Equitable Distribution Rules
If an item turns out to be marital property, New Jersey law says it must be distributed equitably. This means fairly, but not necessarily equally. Fairness will be based on all relevant factors, including those listed in the New Jersey Equitable Distribution Statute. NJSA 2A:34-23.1. Important factors generally include things like the length of your marriage, your current age and health, and how well you are going to be able to support yourself after the divorce.
Take an Inventory of Personal Items
Make sure that before you move out of the family home or let your spouse move out, you have an agreement about what the person moving out can and cannot take with them. Do a household inventory and keep an eye out for anything out of the ordinary. A quick internet search can usually identify whether or not a designer label or the signature of a particular athlete is likely to have significant value. Other items might be harder to assess, but depending on the potential, it could be worth the effort.
Use Mediation to Your Best Advantage
The beauty of mediation is that you can be more creative in negotiating for personal items. You can use your sessions to brainstorm potential solutions and experiment with putting things into different columns. Keep in mind that the ownership rules are the same for personal effects as for other personal property, such as household furnishings, or for real property such as the family home. It is all either marital property or separate property. So, for example, putting a collection of baseball cards worth $20,000 in one person’s column can help balance the $200,000 of equity in the family home in the other person’s column.
When it comes to things that do not have an especially high resale value, try to be objective. Letting your emotions lead you can backfire. It may be difficult to let go of something you previously thought of as a prized personal possession, but it is much more important to keep your eye on what you will really need to live a good life after your divorce.
Are you ready to go to mediation to divide up your personal property? Contact one of our experienced family law mediators today.