Restoring a classic car is a fantastic hobby. After all, not only do you use your mechanical know-how, but you also put your own sense of style into the finished product. If you are going through a divorce, though, you may wonder what happens to your project car.
Arizona uses community property law to define marital property after a marriage comes to an end. Consequently, even if you think your spouse has no personal interest in your project car, he or she may have a legal ownership interest in it.
Is your project car a marital asset?
Typically, marital property is everything either you or your spouse acquire after you say, “I do.” While there are exceptions to this rule, your project car is likely marital property if you purchased it after you married your spouse. The same is true for the parts you intend to install on the vehicle. If you plan to sell the rebuilt car in the future, the proceeds of the sale may also be part of the marital estate.
Must you sell your project car?
You likely have a great deal of time, money and effort invested in your project car. Unfortunately, though, the vehicle may not bring much on the open market, especially if you have not finished it. While divorcing spouses regularly decide to sell assets and split the proceeds, you probably have some other options.
If you want to keep the vehicle, you may be able to buy out your spouse’s ownership interest. Before choosing this option, you should recognize the inherent difficulty in appraising classic cars. Finding an appraiser to value the vehicle may be helpful. Alternatively, you may be able to give your spouse something of similar value in exchange for the vehicle you love.
Either way, before heading to divorce court, you may want to negotiate your project car’s future with your spouse.