One of the critical steps in the equitable distribution process is to place a value on all property classified as marital property. In North Carolina, all marital property (which includes assets and debts) must be valued as of the date of separation.
The value of the marital property is typically determined using the standard of “fair market value.” Fair market value is considered the price a willing buyer would pay to purchase an asset on the open market from a willing seller, with neither party being under any obligation to buy or sell. Fair market value is not the purchase price, replacement value, tax value, or sentimental value. Although the tax value may sometimes be an indication of an asset’s value, tax value is generally not used to support an asset’s date of separation value, particularly as it relates to real estate since real estate values can fluctuate and vary significantly from those assigned by a tax assessor.
The value of bank accounts, investment accounts, and similar financial accounts can generally be determined by reviewing the applicable statement that covers the date of separation or contacting the financial institution and requesting a written statement that specifies the balance as of the date of separation.
A real estate appraiser will generally need to be retained to appraise real estate owned by the parties, unless the parties are able to agree on a value or there is some other reasonable method from which the value may be ascertained. For example, if the parties own a condominium, and an adjacent condominium of similar size and style, was sold on the open market close to the date of the parties’ separation, one or both parties may contend that the sales price of the adjacent condominium represents the fair market value of their condominium as of the date of separation.
When assigning values to ordinary furniture, household furnishings, and recreational equipment, it can be helpful to look on websites such as Facebook, eBay, or Craigslist to find comparable items and see what they are selling for on the open market. Remember, just because you paid $2500 for the sofa, the fair market value is the amount you could sell it for on the open market as a used furniture item.
Art, antiques, guns, coins, and collectibles may require retaining the services of a personal property appraiser who has experience in valuing such items.
A CPA who is an accredited business valuator or a business appraiser will generally need to be retained to value a party’s business or business interest in entities such as a corporation, partnership, or professional association. A CPA may also be retained to assist with valuations of pension or retirement accounts as there are different factors and methods which are considered appropriate for valuing these assets as well.
Debts, including, but not limited to mortgages, equity lines of credit, consumer debt, credit cards, auto loans, personal loans, loans against life insurance or retirement accounts, can typically be valued by reviewing the relevant statement balance that covers the date of separation. If the statement is not available or is otherwise difficult to ascertain, it may be necessary to contact the creditor and request a statement that states the balance of the debt as of the date of separation.
It is crucial for evidence to be presented as to the value of all marital assets and debts. A judge cannot guess, or estimate the value of an asset or debt. If the parties disagree on the value, both parties have the responsibility of presenting evidence to support their contention of the value and the judge must decide which party’s evidence is most credible. If there is not adequate evidence presented by either party as to the value of an asset or debt, including a valuable asset such as a pension plan, the judge can decline to include that asset or debt as part of the division of the marital estate.
Finally, it is important to be fair and realistic when assigning values to assets and debts. Many people tend to overestimate the value of jewelry, golf clubs, or other items they believe will be distributed to the other spouse. One important reason to be fair and reasonable is that if you vehemently argue that your spouse’s coin collection is worth $5000 and your spouse contends that it is worth $2000, then the judge may distribute the coin collection to you at your value of $5000.
- Raleigh Equitable Distribution Lawyer
The process of equitable distribution can be very complex. Accordingly, if you need an experienced and knowledgeable attorney to represent you in your equitable distribution matter, Daphne Edwards can help. Ms. Edwards has the skill and legal ability to handle your equitable distribution matter in an effective and efficient manner. Whether your matter is resolved through settlement negotiations or litigation, you can count on Ms. Edwards to diligently advocate on your behalf to ensure that you receive your fair share of what is rightfully yours.