Dividing property is typically one of the most onerous steps in a divorce. People are often dealing with painful emotions that cloud judgment and make it difficult to know what is fair. There are also logistical obstacles in dividing property that further complicate the process.
One part of the property division process that presents problems involves valuing each asset. Valuations are critical because they are the basis for equitable distribution. In other words, to divide property fairly, you must first know the value of the property. There are at least a few challenges that can arise when valuing property.
- You don’t know how to assign value. It may be simple to figure out the value of property like bank accounts, cars or personal items, but this is not the case with all assets. For instance, business investments, collections and intellectual property can be very difficult to appraise because they may be unusual or very complicated.
- You disagree on the values. Factors like emotional attachment, perceived worth and bias affect the value people see or don’t see in a specific asset. A person might inflate the value of a sentimental item or understate the value of a collection, depending on what they stand to gain or lose.
- You aren’t sure it’s even marital property. In general, separate property is not eligible for division in a North Carolina divorce. However, some assets have both marital and separate components, which can complicate valuations. This could be the case with separate property that increased in value due to the efforts of the other person. In these situations, it can be difficult to know how much of an asset is marital property.
These and other elements of property valuations can make asset distribution more complex than many people expect. To address these issues and work toward a satisfactory agreement, outside help is often necessary. Parties can work with financial professionals, appraisers and legal counsel to identify and value property fairly.