Valuation of Marital Assets
What is fair market value?
Accurately determining what is the fair market value (FMV) of any and all items of a couple's personal, real, tangible or intangible property is essential to representing a client in a complex divorce case.
FMV can be simply defined as "the price an item would sell for on the open market." This often means what an item could sell for at a public auction or yard sale. It does not mean its purchase price or replacement cost.
Valuation of Real Estate
In simple divorce cases, the parties may be able to agree on the value of major assets, such as the house. For example, if the house was appraised in the past year or so for a refinancing, the parties may well agree to use that value for their residence.
However, professional appraisal of real estate (residence, farm, rental property, commerical property, vacant land, etc.) is commonly required in divorce cases.
Sometimes it is necessary to ascertain what was the value of a piece of real estate at the time of the marriage (particularly if it was owned by one party prior to the marriage) and to measure that against its value today. Occassionally, one spouse will have invested a significant amount of "sweat equity" into real estate which had been owned by the other spouse prior to marriage. The increase in the property's value will be a key issue in the division of this asset.
Valuation of Personal Property
The IRS defines "personal property" as "property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities."
Other assets which may require appraisal would include furniture, tools, jewelry, household furnishings, appliances, linens, books, collectibles, automobiles, boats, trailers, sporting equipment, motorcycles, computers, etc. In that case, a personal property appraiser would be hired by one or both parties to inventory and value every item found in either of the parties' homes. This process is somewhat expensive, but is often required in divorce cases where the parties are unable to agree on how to divide these items equitably.
Other kinds of property
Business interests, professional practices (doctors, lawyers, accoutants, etc.), stock, stock options, investment real estate, copyrights, inventions, etc. are important examples of other types of property which may require appraisal or valuation by an expert.
If you are considering divorce, we can help guide you through the complex issues in your case. Contact the divorce attorneys of Waters, Tyler, Scott, Hofmann & Doane -- (812) 949-1114. Weekend and evening appointments available; major credit cards accepted.
