When going through a divorce proceeding in Minnesota, the law requires an equitable division of marital property and debts. In most divorce proceedings, emphasis is placed on how to structure the overall division of large assets, such as your home, your investment and retirement accounts, and your vehicles. But what about all your other things? How do you equitably divide all your furniture, appliances, artwork, electronics equipment, hunting and fishing gear, etc.? Each of these individual items probably doesn’t carry as much value as the “big ticket” items, but they do have value nonetheless, and replacing these items after your divorce proceeding can be an expensive endeavor.
Most attorneys will advise you not to have them spend a lot of time on the issue of dividing your personal property items. Indeed, attorney fees can add up quickly, so they should be advising you not to “throw good money after bad,” as you will find yourself spending more in attorney fees arguing over the division of your personal property than those items are even worth. Still, sometimes divorcing couples can get hung up on how to accomplish the task of dividing these smaller items things in a fair and equitable manner. If your attorney advises against getting them involved with that, then how do you get it done if you can’t reach agreements with your spouse? Here are a few suggestions that can help.
- Watch out for the games people play. Over the course of nearly three decades, I’ve witnessed a lot of game playing with the issue of dividing personal property, especially when it comes to assigning values to the items. People tend to place a low value on the items they want and a high value on the items they know you want, with the obvious objective of maximizing their share of the overall division. Steer clear of the arguments that come across as “that item is worth a lot, but I don’t want it” or “this item isn’t worth anything, but I have to have it.”
- Use this (almost) fail-safe method. There are different methods of dividing personal property equitably, but my personal favorite method, which I believe is effective almost every time, is what I call the “auction method.” Here’s how it works:
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- First, see how many items (if any at all) can be divided fairly between you without much discussion/debate. Remember, it’s about the overall value, not the total number of items. You need to do this in such a way that you can call it “fair” as to what has been divided thus far.
- Then make a list of the items of personal property that are in dispute, and make sure each party has a copy of the same list of items.
- Next, each spouse takes their list and writes down what each item is worth to them, and they decide for themselves how they come up with the value they assign to the items. The value you assign to an item can be based on anything that makes sense to you – from sentimental value, to what it would cost to replace it with something new, to how much you could sell it for, to what an appraiser told you. It doesn’t matter how you came up with those values, so long as you accept the values that you’ve assigned. Simply put, you are writing down what each of the disputed items is worth to you.
- You can conduct the above method either by “secret ballot” (which is my preference), in which you don’t show the other spouse your values until the end, or through an open discussion, in which you each tell each other how much you value each item as you go along.
- After you each have assigned values to each of the various items, compare your list with your spouse’s list, with the understanding that each of the disputed items will go to whoever valued it the highest, and they will be taking it at their own assigned value. That way, the item will remain with whoever values it the highest, while eliminating the game playing that was described earlier. This is why it is important to accept the values you’ve assigned to the items when going through your list, as you will be bound to those values later.
- The last step is to add up the total value of all items of property going to each spouse, and then make up the difference (equalize), if necessary. Most likely, one spouse will end up with a higher total value of their items of property than the other. That’s okay, as long as you either agree that its “close enough” or equalize the difference with some cash paid at the end. How do you calculate what is needed to equalize? Just subtract the lower total from the higher total, and then divide the result by two.
Here’s a simplified example as an illustration:
Items Spouse A’s values Spouse B’s values Item goes to Dishes/silverware X X Already divided Large TV $800 $500 A Small TV $200 $300 B Jewelry $2,000 $4,500 B Furniture – living room $5,000 $4,000 A Furniture – bedroom 1 $3,000 $3,500 B Furniture – bedroom 2 $3,000 $2,500 A Lawnmower $300 $150 A Power tools $400 $200 A Camping equipment $150 $300 B Hunting/fishing gear $150 $300 B Artwork $1,000 $600 A Espresso machine $600 $300 A Each Spouse’s total $11,100 $8,900 Equalize -$1,100 + $1,100 Final $10,000 $10,000
Under this scenario, each party will receive the respective items that they valued the highest, as indicated in the chart. The total value of all of Spouse A’s property is $11,100, and the total value of all of Spouse B’s property is $8,900. Of course, if the parties agree that the two figures are close enough in value, they can call it “fair” and be done with it. If instead they wish to make it exactly equal, then calculate difference between the two totals ($2,200), and divide that by two ($1,100). So, Spouse A would pay half of the difference ($1,100) to Spouse B to make it equal. -
- Still can’t agree? Then go to binding arbitration. There are neutral professionals out there (many of whom are attorneys) who are willing to meet with you and your spouse, discuss the disputed items of personal property, and determine how to divide them. In most cases, you will spend only an hour or two, and that should be more than sufficient time for the arbitrator to hear what you have to say and make a decision. You can discuss (and argue) why you think various items should go to you, or how certain items should be valued. The process is mostly informal, and the arbitrator will make a binding decision. You will spend only a fraction of what it would otherwise cost in attorney fees, and only a fraction of the amount of time it would otherwise take to proceed with a formal court trial.
If you would like further assistance with the process of dividing your assets and debts, or if you would like me to serve as an arbitrator for your personal property dispute, contact me for more information.