If you’re getting divorced, your marital property has to be split between you and your spouse in a process known as equitable distribution. The first step is to value property that isn’t going to be sold. That’s where an appraisal comes in. A professional is brought in to determine the value of that item. Hiring a knowledgeable expert is key to helping ensure your appraisal is accurate.
Why Should You Get an Appraisal?
Under the rules of equitable distribution, marital property must be divided between spouses. Generally, marital property is property that is acquired after the parties’ wedding date and up to the date upon which a divorce action is filed.
Before anything is split, you have to know what the property in question is worth. While it may appear to be easy to value certain property, you should still hire a valuation expert to ensure that the value you and your spouse put on the asset is accurate. Of course, with more complicated assets, a valuation expert is required.
What Property Should Be Appraised?
Typically, any real property, including your home and personal property with significant value, such as art and collectibles should be appraised. Pensions and other retirement accounts may need to be valued in certain circumstances. Ownership interests in a business must also be valued.
How Will the Appraiser Determine Value?
Depending on the nature of the asset, the appraiser may view the property, research comparable sales and review relevant financial and other documents. Then, the appraiser will prepare an appraisal report indicating the value of the item.
How Do You Know the Appraisal Report Is Accurate?
First, you should hire a reputable and skilled appraiser. If you hired the appraiser, you can ask him or her questions about what methodology was used and what information he or she relied on to determine the valuation. Similarly, if your spouse hired an appraiser, your attorney can obtain this information in the discovery process.
An appraisal can be challenged. If you disagree with it, you can get another appraisal and then come to a settlement or litigate the matter with your spouse. Ideally, it is best to settle. In the case of real or personal property, if you cannot agree on a valuation, the judge can order the sale of the property and divide the proceeds between you. This could cost you more time and money and result in unfavorable tax consequences.
If you are considering divorce, contact us to discuss how we can assist you in achieving the best result in your matter.