How And When Does A Court Value Or Divide Marital Property?
Generally, the court will value marital property as of the date of the trial, unless the parties agree to a different valuation date. Many people desire the court to use the date of separation as the date by which property is valued, but typically a court will use a date closer to the time of the actual divorce or trial. That said, the parties are free to reach agreements between themselves about how and when the property would be valued. How property is valued depends on the type of property or vehicles. For example, Kelly Blue Book is often an acceptable form of valuing a vehicle. For real property, an appraisal is the best evidence. The court could also accept a market analysis from a realtor, or even under some circumstances, Zillow estimates; or just the testimony of the parties.
Each party is able to testify regarding their belief of the value of the property. For financial assets, the court would use the most recent statements regarding what the worth of the asset is, whether it would be a stock report, a retirement statement, or bank account statement.
How Is Equity In A Marital Home Or Real Property Divided?
Unless a portion of the equity is considered separate property, the court will generally require one of two things to happen. (1) The party that is staying in the marital home or that is being awarded possession, must refinance the marital home, and buy out the other party from their half of the equity. (2) If that is not possible or desirable, the court can require the home to be sold, the encumbrances on the home to be paid, the realtor’s fee to be paid, and any remaining funds to be equally divided at closing. If one party wishes to maintain the marital home, generally the court is going to require evidence that they are able to make payments on the mortgage.
However, if it becomes evident to the court that the party wishing to maintain the marital home can’t afford to do so, then the court may either award the marital home to the other party or require it to be sold. If one party is allowed to maintain the home and refinance the home in order to buy out the other side’s equity, they will generally be given anywhere from 3 to 9 months to successfully refinance it. The parties are generally ordered to cooperate in this process and to sign any paperwork necessary for the refinance or the sale to occur. If one party fails to cooperate, after the divorce decree enters, the cooperative party may file an order to show cause to have the non-cooperative party held in contempt and sanctioned for their failure to cooperate. Under some circumstances, the court may act very quickly, and in extreme cases, the court may sign the necessary transfer documents itself, in lieu of the signature of the non-cooperative party.
What Factors Does The Court Consider In Dealing With Specific Types Of Property?
The court will consider how debt is being divided, and whether one party is taking more of the debt—and therefore should be awarded a greater share of the property.
With respect to business assets or businesses, the court will often simply award one party the business, including all the debt and obligations thereon, as well as the income from the business, but use the income receipt from that business as a factor to increase the other party’s alimony award. However, the court doesn’t have to do that, because the court can divide the business however it wants. The court is more likely to divide the businesses between the parties if both parties were involved in the operation of the business.
With respect to cooperate stock or non-public stock, the court will try to avoid joint ownership of closely held corporate stock, because it’ll keep the parties tied together, whereas publicly traded stock is easier to divide and sell.
With respect to creative works such as sculptures, paintings, or music, those items will generally be valued at the time of the divorce. The court will generally not allow speculation regarding how much they someday will be worth in the future. Additionally, the court will often award creative works to the spouse who created it.
Professional licenses or degrees are not considered divisible marital property.
With respect to vehicles, if both parties’ names are on the title, the court will require one side to refinance, or the party receiving the vehicle to refinance to get the other party’s name off the loan. Otherwise, the Court may order the vehicle sold.
For more information on Valuing or Dividing Marital Property In A Divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (801) 616-3301 today.