In order to divide non-monetary assets, you may need to have a valuation done. The assets could be worth more or less than you paid for them, so never assume that purchase price determines their worth.
For instance, perhaps you bought your home for $200,000. The market has since recovered, and it’s now worth $300,000. If your spouse wants the house and you agree to let it go in exchange for $200,000 of other assets — from an investment portfolio, perhaps — then you’ve really just cost yourself $100,000. That’s more money than many people make in a year, and it’s gone if you don’t accurately value the home.
The same can be true for things like cars, artwork, collectable firearms, real estate property and much more.
One key thing to remember during this process is the importance of the valuation date. These values are fluctuating all the time. Divorce can take months. Appraising items at the wrong time can cost you.
For instance, maybe your divorce is set for May. You have a home appraisal done, and the house is worth $300,000. In June and July, while the divorce process is going on, fewer homes than expected hit the summer market. Because of the law of supply and demand, home values start to climb. When your divorce is finalized, your home is actually worth $325,900. By doing the valuation too soon, you could lose $25,900.
Dividing assets can get complicated. It’s not always as easy as making a list of who gets what. Make sure you really understand the process and all of your legal options to fight for what you deserve.
Source: Forbes, “How the Valuation Dates of Different Assets Are Decided During Divorce,” Jeff Landers, accessed Feb. 16, 2018