Who gets the leather couch?

People spend a great deal of their disposable income on household goods and personal property. We save up for that beautiful dining room suite that will seat 12. We are so thrilled when we buy a new leather sectional sofa. When people separate or divorce, those household goods have to be divided too. It is particularly difficult to divide some of them because:

•  they may have sentimental value to both of you,
•  they may be a one of a kind item, and thus, irreplaceable, and
•  they do not retain their value well.

Household goods lose value the moment they are brought home from the store. It is very difficult to accept that while it may have cost over $50,000 to furnish a new home, the items are worth a small fraction of that in a few short years.

Below are some practical choices to help you divide your household goods without spending a fortune in Court, with lawyers or with mediators.

1. Choice 1 - Agree

1.1 Make a list of all household goods and agree on the contents of that list.

1.2 Agree on the parameters of that list. You may wish to include tools, patio items, garage items, lawnmowers, musical instruments etc.

1.3 If you both agree that:

a) any of the items were a gift to the other person from a third party;

b) any items belonged to the other person before the marriage; put those items on a separate list entitled "Exempt Property" (the value of exempt property is not important). This property will then go to that person.

1.4 Value the rest of the items (see the hints for valuing property in Paragraph 4).

1.5 Then simply agree on who gets what. If one person ends up with more valuable property (based on your agreed values) that person must make an equalization payment to the other person.

2. Choice 2 - Draft

2.1 Follow steps 1.1 - 1.4 from Choice 1 above.

2.2 Do a “draft” like a hockey draft. Flip a coin to see who gets to start.

2.3 The first person picks the item he or she wants. The second person picks an item of equal value or a number of items to make up the same value.

2.4 You both continue “drafting” until all items are gone. Both of you should end up with property of equal value.

3. Choice 3 - Silent Auction

3.1 Follow steps 1.1 - 1.3 from Choice 1 above.

3.2 Each person submits values for each item. The person who submitted the highest value gets to keep the item.

3.3 The value of the items retained by each person is added up and the person with the highest value of items makes an equalization payment to the other person.

4. 3 Ways to Value your Household Goods and Personal Possessions

4.1 Agree

a) There are different ways to value household goods. Unless an item is brand new the purchase price is not important

b) Sometimes we use the value if it went to auction, but that can result in an artificially low value.

i) Use your common sense - what would you pay someone for that item right now?

ii) Rarely, if ever, do we use “replacement” value to value household items. You and your spouse can agree to do that if you want to and if you both have independent legal advice, but that is not the way a Court would value household goods.

4.2 If you can’t agree, be creative

a) Make a list of the items you can’t agree on

b) Look for creative ways to come up with acceptable values for those items – some ideas are:

- average your value and your spouse’s value

- get a neutral friend to value those items

- check out kijiji or other used goods advertisements or stores

4.3 Appraise

a) You can have your entire household appraised by an accredited appraiser for a fee, generally $200 - $400, depending on the number of items and whether or not there are antiques.

b) When you receive the appraisal you can then follow choices 1 or 2 above.

c) If you cannot find an accredited household goods appraiser, try a second hand store - often someone there can give you values  

5. What to do about the children’s items

5.1 It is always difficult when there are children involved and some of the property belongs to your children or is for your children’s use.

5.2 In these cases, agree on what are legitimate children’s items and divide these between you in accordance with:

a) your children’s wishes;

b) the amount of time your children spend with each of you;

c) the nature of the item.

5.3 It is very important to be reasonable and moderate in your discussions when you divide your children’s things. In addition, not all children’s items have to have a “home” – some of them can move back and forth between the two homes just as the children do.

6. Ways to keep your legal costs down

6.1 It will very expensive for you to pay your lawyers to fight about household goods and personal possessions. Your lawyers may cost you more money than the value of the items you are arguing about. It will be much less expensive for you to solve these differences yourselves, with the help of a neutral third party (perhaps a neutral friend), or in Mediation or Collaboration. REMEMBER, however, you will have to pay a fee for Mediation or Collaboration.

6.2 Judges in our Courts are not interested in spending time dividing household goods or personal possessions between you. A Judge may penalize either or both of you with costs if the Judge has to deal with this kind of problem. It will be much cheaper and faster for the two of you to solve your differences about household goods and personal possessions yourselves.

6.3 Often one spouse will say, “I don’t want any of the household items”. If that is the case, household goods do not have to be divided. But you have to determine the following:

a) does the other person want all of the household goods? If not, some may have to be given away or sold.

b) does the person giving up the household goods want a cash payment (or another asset) in exchange for the household goods?

c) does that person truly not want any of the household goods, including any asset or cash to compensate for the household goods?  

6.4 Even when the household goods are divided equally, it is often inevitable that both spouses are going to have to buy some new furniture or household goods. Looking at it another way, you may want to divide your household goods so that each of you have to spend approximately the same amount of money to obtain new household goods in replacement of the ones you did not get. Then each of you can make your own choice about how you will replace them (i.e. buying new or second hand or doing without).

© Marilyn Herrmann

 

This information was provided as a courtesy by Niblock & Company LLP for information purposes only and should not be taken as legal advice. You should not rely on, or take or fail to take any action based on this information. If you need legal advice, contact Niblock & Company LLP or a lawyer of your choice to obtain advice that is particular to your situation. The provision of this information does not create a solicitor/client relationship.