The Importance of Valuing Joint Property in a Divorce
While it is very difficult and time-consuming, the value of jointly held property is a very important part of your divorce settlement, especially for those who live in community property states. The valuation of joint property requires a great deal of preparation by each divorce lawyer especially if the divorce takes place in one of the community property states and either of the parties in the divorce owned property individually prior to the date of the marriage, and the property increased in value substantially during the marriage. Both spouses will need to work with their divorce lawyers in order to facilitate the preparation of a balance sheet of all joint marital assets.
While the value of assets a couple owned prior to the divorce are not essential in most states, they play a significant role in community property states since all assets are considered joint property once a marriage takes place with the exception of gifts and inheritances. Because of the community property laws that exist in some states, one of the most important divorce steps involves the valuation and assignment of pre-marital property.
Under the law marital property is defined as anything a couple purchases after the marriage or any property each may have purchased before they married but has increased in value because of marital assets. The simplest way to explain this concept is this: if the husband owns a home before getting married none of the equity in the home is marital property except the increase in value that occurs after the marriage takes place. Of course, this requires assessment of the value of the property immediately preceding the marriage since the equity that was in the home prior to the marriage is excluded from marital assets and thus not required to be part of the property division upon cessation of the marriage.
The valuation of post-marital assets requires the expertise of a divorce lawyer or accountant who will determine the value of any property and other assets each spouse owned before they entered into the marriage. Once the pre-marital valuation is complete, the lawyer or accountant will determine the current market value of the same property. Joint marital property consists only of property that increased in value because of the addition of marital funds. Do not assume that all property that increases in value after your marriage becomes part of joint marital property because this may not be the case. For instance, if the husband has an IRA account he acquired before his marriage to which he adds no additional funds after the marriage the wife has no claims to this asset as part of the asset assignment in a divorce. Likewise, if a couple opens a savings account for a minor child those funds belong to the child and are not part of marital property even though marital assets may be used to increase the value of the account.
The easiest way to determine the fair and equitable valuation of marital property is to use the service of a divorce lawyer. This is one of the essential divorce steps and is not one you should attempt to determine on your own without professional help.
