MaestronetLurker

Valuing Handmade Instruments for Divorce

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I recently got divorced, and really got screwed on my instruments. They valued them at 80% of retail and awarded my wife 1/2, but didn't assign any of the debt to her. So on top of what I already owe on my business she just got another 40%. I'm appealing the case (which is about a 1% chance of success apparently), and since I'm out of money I'm doing the work myself (so less than a 1% chance I guess). I'm struggling to find any legal precedents for how to value the work of new works of art. 

In my case, I started making violins a few years back, but don't really have clientele in that market. I've mostly done repair for other shops and moved out on my own a couple years back. The divorce essentially killed the business so that series of events means my instruments never get seen/played. Buying them from my wife (who also makes 3 times as much money as me and doesn't need me to cut her a check) ensures I go bankrupt within 6 months and probably lose all the instruments. 

I've got 3 violins with a combined retail of $20,000. I know that's high for a new maker, but after consulting with numerous players and makers the consistent suggested retail was $7,000-$15,000 they were 'known' maker's instruments. For a new maker I went with prices about well below what was typically suggested. I've used them more as portfolio pieces that help when I meet a new player. Putting a handmade instrument into their hands gives them confidence that I know what I'm doing. That has served me well.

My other inventory is factory instruments, which I owe 25% of retail on. Given the $50,000 spent in legal fees in the last 2 years I can't afford to pay out any more.

I know it's a long shot, but if anyone has some legal precedents to throw my way I'd appreciate it. My deadline is 1/15/18, so I'm about out of time. Thanks.

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I'm not a lawyer and my advice is merely conjecture, so take it with a grain of salt:

I think you should be able to take the violins in question to some 3rd party violin shop that does appraisals, and get written estimates on the insurance replacement cost of your instruments, which tend to be notoriously higher than actual market value, but if you are a relatively unknown maker whose work can't be found with a simple Google search like say David Burgess' works can, depending on where you live your work might be appraised well under $2k-$5k.

Hopefully someone else has more insight on these matters. Sorry to hear about your troubles.

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The only legal precedent I can give is a statement made by Bill Burr , it went something like...

"oh, hey, gee, is this the line I get in to give away half of my stuff?" 

sorry man, sounds like a real bummer....these prices aren't astronomical by any means, and they know it, but they also know they can hurt you with it and make it hard to contest.

 I'm sorry to inform you but unless you can counter balance the intentional nwo legal slant against you {being the gender formerly known as a male} with tons of money to beat her back, the cards are stacked against you. Unless a man is will to get a very expensive aggressive lawyer who specializes in asset retention  {which should have happened before nuptials} it almost seems as most lawyers who represent men allow the system to push them around intentionally and always seem to be fighting from an on the ground defensive position, the mere fact that this has been drawn out for 2 years is a prime example of how the system is completely rigged, it's like the guy representing you and the guy representing her are working together as a team in order to screw the both of you using the known legal slants that are exploitable...The amounts of money you are expressing while not chump change, it is not like you are Jeff Bezos and are dividing king midas's treasure, so really there is no reason for this to drag on so long, imo, unless there's something I don''t know. A good lawyer will go in with shock and awe and lay down time frames and demand out and out quick, they are very aggressive and do not allow for stalling, they cost more upfront but seem to save in the end as your post seems to imply as it's over in 2 months not two years.

Basically you get dragged out, which justifies billable hours, the deck is stacked in her direction out of the gate so she'll get the bigger payout which her guy skims his part from as well as all the billable hours which you end up paying for her...it's all a scam

sorry I'm not trying to make you feel bad, I'm just giving my opinion as you've laid it out here for all to see...I'm sure there are lots of things I don't know that may or may not change my response, but I do get a definite sense of desperation, sadness and a general feeling of being kicked around in a sophisticated arena that you don't have lot's of experience with , as getting divorced is not something you do everyday.

I remember the first time I started hearing about these "taken to the cleaners" divorces when I was in my late teens, and then how the media began pumping up the celebrity divorces and the huge payouts, and how this lemmings lead to slaughter, knowing all the pitfalls yet marching off the cliff anyway,mentality about marriage.

and then as I got older and started to see what was happening to many of my men friends and how the hopes of a happy life, that was over in 2-5 years, ended up basically ruining some of their lives, seemingly permanently  

that was about the time I thought to myself that beyonce can stick it where the sun don't shine

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I find it curious that you have any self made instruments in your inventory. I only have instruments that I bought from a third party in my inventory, to the net price I actually paid for them. At a pinch, I could imagine appraising something like that, at the net cost of material, and perhaps working time spent (although I would resist that).Should you only have to pay anything at the point where you sell an instrument, it would be obvious not to sell them at all, rather make some new ones. If litigation is becoming too expensive, it would be prudent to stop litigating.

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Maestronet Lurker, give me a call. I can't cite "case law", but I deal with people going through divorce on a regular basis, and can share some examples of strategies which have been used effectively.

Since these violins are a joint asset, one way of valuing them is to offer them to each party for whatever they are willing to pay. If your wife is willing to pay $2000 for them, for instance, or nothing, then it's arguable that this is what she truly thinks they are actually worth, and what you should also be able to keep them for.

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Clearly her lawyers are overvaluing and displaying some serious ignorance of the market for new violins. Can’t  you just give her half of the violins? Even offer them all at their valuation towards the total settlement?

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I may have bought the same refrigerator three times, first when it was new, and then from an ex or two. :lol:

When you own a business, a pre-nupt is almost a necessity, if you don't want your spouse to  be able to take off with half of your tools, jigs, patterns, wood inventory, "intellectual property", leaving you without even a means of earning a living.

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Sorry to hear of your troubles!!! Having gone thru a divorce once, I can tell you what my attorney told me: "Divorce is the screwing you get for the screwing you got!"

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3 hours ago, romberg flat said:

In an awkward situation maybe a little humor to help...:unsure:

image-CROSS-SECTION_1622.jpg.50cf48319937a517115d2bc81e0aa8a8.jpg

This is the King Solomon approach ...

But I was suggesting handing over all 3 at a net of $20k, since that's what the opposing lawyers say they're worth. Sounds like a great sale!

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On 1/11/2019 at 12:15 PM, violguy said:

Sorry to hear of your troubles!!! Having gone thru a divorce once, I can tell you what my attorney told me: "Divorce is the screwing you get for the screwing you got!"

A successful Wall Street investor friend laid the statistics and probabilities  out very well.  All told, being married worked out financially much worse for me than regular visits to "massage parlors" would have. :lol: How fortunate I am to have the acquaintance of experts in so many fields !:D

Not that I am in any way recommending the sorts of fake love massage parlors and stripper bars have to offer. Some of my partners have been true soul mates, aside from when they fell catastrophically off that path.

Maybe I've got a better one now. Only time will tell, and I'm semi-sort-of financially better protected than I once was.

Emotionally, I hope I will not crash and burn to the extent that I have before, when partners went hugely outside of their promised paths.

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Acording to tax law if you donate or lose or have destroyed something that you youself make you can only recover the price of the materials not labor. I don't see why a Lawyer can't argue the same. If you sell them for money that's different. Give her half of the unsold fiddles at worst case and let her try to get whatever she can. It would be the same as if you were a painter. If she won't go for this it shows bad faith. You may be getting bad advise.

 

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12 hours ago, David Burgess said:

When you own a business, a pre-nupt is almost a necessity, if you don't want your spouse to  be able to take off with half of your tools, jigs, patterns, wood inventory, "intellectual property", leaving you without even a means of earning a living.

You've undoubtedly heard of "divorce Barbie";

She automatically comes with half of Ken's things...

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2 hours ago, AtlVcl said:

You've undoubtedly heard of "divorce Barbie";

She automatically comes with half of Ken's things...

Yes,and divorce Ken comes with Midge, Barbie's best friend.

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And seriously, lurker, your divorce sounds like a nightmare. I hope you figure out how to keep your business going, let alone, how to maintain your fabulous lifestyle that you once enjoyed. It sounds like the divorce is just another big payday for her. Like others said, maybe you can figure out how to get her to buy instruments from you at 80% retail instead of getting paid by you for you to keep them. 

You must have really pissed her off.

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I believe that any business inventory value is the price you paid for the items or in the case of a manufacturer the price of the materials used. The tax is paid on purchases in the year they are received based on that price. Any profit you make later is taxed in the year the merchandise is sold.

I would certainly think  that the appraised value for a divorce would be  no more than inventory value.

I don't know where your divorce is taking place but Carla Shapreau in California is both a violin maker and a lawyer and might have some helpful information.

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23 hours ago, not telling said:

Yes,and divorce Ken comes with Midge, Barbie's best friend.

HIghly unlikely, considering Barbie has been trashing Ken to all her girlfriends forever. After Ken pays both lawyers, he won't have a pot to you-know-what in.

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Don't you know anything about the Barbie franchise, Larry? Mattel got in big trouble for producing a pregnant Midge doll, a doll which most scandalously wore no ring. This forbidden love has been going on for decades. :D

Lurker, I really feel for your endgame marriage situation and all, but I think it just sounds so shocking that I can't stop making terrible and inappropriate jokes. Of course, after DB's comment there basically is no inappropriate, but still. I hope you figure this all out in the next few days and get screwed a little less royally. I don't suppose it would work to ask her nicely to divorce you without trying to completely destroy you...? 

 

 

 

 

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On 1/11/2019 at 11:01 PM, not telling said:

You must have really pissed her off.

Sometimes or most times towards the end the eye to eyeness just isn't there - Long story short,  I'm indebted to my x ol' lady for allowing me the new freedom that was awaiting.  

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Thanks for some good suggestions. I did get a small extension to work out an error in the transcript, so I'll try to pursue some of these suggestions.

Sad to say, but the financial stuff is the tip of the iceberg. It will make more sense if I explain that she has a mental illness rooted in childhood trauma that involved, among other things, her family members kidnapped by their father in the midst of a divorce. When she realized I was leaving the marriage she accused me of abuse and slammed me with accusation after accusation for the next 9 months to prevent me being alone with our child. There's some evidence she may have tried to flood me out of my apartment to prevent me from having a permanent residence to share custody, and a bunch of other scary things. Once the court ruled for 50/50 visitation and she fired her lawyer she calmed down a bit, but came after me financially instead. 

I had left the last shop I worked for and was building my shop as a competitor. My ex involved the former employer in the divorce (and presumably told him the same tall tales about abuse etc...) and shortly after that all the people I knew through that shop stopped returning my calls/emails. My first 6 months in the home shop part time I had $22,000 in revenue, and in the subsequent year I have had $3,000. So, I'm not sure where I go from there, but I've got some ideas in the works. Being tied to this area, though, I may have to put the lutherie on the back burner under the circumstances.

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42 minutes ago, MaestronetLurker said:

Thanks for some good suggestions. I did get a small extension to work out an error in the transcript, so I'll try to pursue some of these suggestions.

Sad to say, but the financial stuff is the tip of the iceberg. It will make more sense if I explain that she has a mental illness rooted in childhood trauma that involved, among other things, her family members kidnapped by their father in the midst of a divorce. When she realized I was leaving the marriage she accused me of abuse and slammed me with accusation after accusation for the next 9 months to prevent me being alone with our child. There's some evidence she may have tried to flood me out of my apartment to prevent me from having a permanent residence to share custody, and a bunch of other scary things. Once the court ruled for 50/50 visitation and she fired her lawyer she calmed down a bit, but came after me financially instead. 

I had left the last shop I worked for and was building my shop as a competitor. My ex involved the former employer in the divorce (and presumably told him the same tall tales about abuse etc...) and shortly after that all the people I knew through that shop stopped returning my calls/emails. My first 6 months in the home shop part time I had $22,000 in revenue, and in the subsequent year I have had $3,000. So, I'm not sure where I go from there, but I've got some ideas in the works. Being tied to this area, though, I may have to put the lutherie on the back burner under the circumstances.

That is so sad to hear! Maybe you should rethink how much you are tied to this area, since leaving would solve a lot of problems if you would like to stay a luthier.

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