Dividing The Exotic Car Collection
Community property assets usually include everyday vehicles, which can be divided through mutual agreement rather easily at the time of divorce. If there is only a car, you can sell it off and split the proceeds or one spouse reimburses the other and retains the car. However, the property division may get contentious if the vehicles involved are exotic collectibles or have a high value.
A competent divorce and property division attorney in Orange County will understand that you or the other party or both may have an emotional attachment with a vehicle or its market value may be very substantial. The attorney’s goal will be to help you achieve a settlement with your ex-spouse so that the decision of dividing the cars does not have to be made by the court.
The first step in this endeavor would be to come to an agreement on who gets to keep the exotic car collection, or which vehicles go to whom, or whether one party wants a financial compensation equivalent to their share in the property. The second step would be to have the exotic car collection appraised from a professional appraiser.
Valuation of a Collectible Vehicle
If your divorce lawyer is resourceful, they will connect you to a reliable appraiser who can determine the appropriate financial value of your exotic or vintage car collection. Some of the factors that will go into determining the valuation of these cars include:
- How popular this model or make is among classic car collectors
- What is the percentage of reconstructed or replacement parts as against the original equipment in your vehicle
- What is the general condition of the car’s exteriors and interiors
- Does the car have a special ownership history (was the actual vehicle or a similar model driven by a celebrity or featured in a movie)
Is the Car Community or Separate Property?
If you bought the exotic car prior to your marriage, it will be treated as your separate property at the time of divorce. But if the market value of the vehicle increased during the course of marriage, the appreciated portion may be considered as community property and you can claim half of it. You may also receive a collectible vehicle as a gift or inheritance (family heirloom) before or after your marriage. If you have not comingled the ownership of the vehicle, it will be counted as your separate property at the time of divorce.
To determine whether an exotic car collection is community or separate property in a California divorce, your divorce attorney will focus on establishing the following facts:
- The date of your marriage
- The date of the purchase of the exotic car
- Who purchased the car
- What was the source of funds
- What was the car’s purchase price
- Who paid for the car’s repair and maintenance over the years
- Title of the car is in whose name
If there are multiple classic cars to be divided, you should hire a certified expert with thorough knowledge of all the vehicles in your collection. Your Orange County divorce attorney will recommend that both you and your ex-spouse should note down in writing which cars from the collection they would like to retain after divorce or sell off.
How does an Appraiser Value Exotic Cars?
A qualified and experienced collectible car appraiser will usually focus on three different information sources to determine the present financial worth of such cars:
- Public records showing recent sales of similar classic cars that are as close as possible to your vehicle in terms of model, make, and condition
- Latest price figures published in standard directories, such as the guide published by NADA (National Automobile Dealers Association)
- The appraiser’s own network of knowledgeable sources or collectors of such vehicles or their own knowledge and expertise
Professional appraisers will determine the FMV (fair market value) of the classic automobile using various resources as listed above as wells their own knowledge and experience. According to the Code of Civil Procedure in California, the FMV is the amount that the asset can fetch if it is sold in the market at present under normal conditions.
“Normal conditions” usually include: (a) The car is sold in the open market (b) Both the buyer and seller are willing parties, and neither is under a compulsion to act (c) Both buyer and seller are reasonably aware of the pertinent facts related to the vehicle.
What Happens if no FMV is Available for a Rare Vehicle?
Sometimes it is possible that the vehicle in question is so rare or has such extraordinary characteristics (like it was owned by a famous personality) that no precedent is available to determine its fair market value. According to California Evidence Code, in these situations, the court may adopt any valuation methodology that it finds to be just and equitable.
Remember that unless you and your ex-spouse are able to agree to a fair division of the exotic car collection with the help of your attorney, the family law court judge will decide it for you. The judge holds the final authority to divide this collection between you and your spouse or sell off the vehicles after their appraisal and divide the proceeds as part of the property division.
If you have a collectible vehicle that is very dear to you and you do not want to part with it or have it sold off, you should negotiate with your ex-spouse through your divorce lawyer as soon as possible. If the matter goes to the court and the judge gives a ruling, it would be too late to negotiate a deal.
Consult with a Divorce Lawyer with Expertise in High Value Assets
The bottom line is that if you have vintage cars in your collection or other valuable arts, antiques and collectibles that are of rare value, you have a lot at stake in a California divorce. Accurate and fair appraisal of these assets is vital along with determining their correct status as a marital or separate property. A seasoned divorce attorney in Orange County who is well-versed with high value asset division cases would be your best bet to protect your rights.