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How is Property Valued in a Divorce?

White square with a gold border and the words “How is property valued in a divorce?” with the Freed Marcroft family law firm logo in the lower right corner.Connecticut courts need to divide property between spouses in order to finalize a divorce.   To understand how property division works in Connecticut divorces, you need to understand how property is valued.

Read on to learn more.

Property Division Analysis

Generally speaking, there are three stages of analysis when it comes to property distribution in a Connecticut Divorce.

  1. Definition – whether an item meets the definition of property
  2. Valuation – what is the value of the property
  3. Distribution – how the property will be distributed between the spouses

Today’s topic is the second category, how to value property in a divorce.

Read: What’s the Definition of Property in a Divorce?

Basics of Property Valuation

Connecticut is an “all property” state, which means that the vast majority of spouses’ property can be divided.  Once it’s determined that an asset can be divided, the second step is to value that asset so that the court can divide it equitably.

Timing of Valuation

Generally speaking, courts value assets when a divorce is final, not when it is filed.  That said, Connecticut law does not require that all assets be values as of the exact date of the judgment.  Sometimes it is too difficult to value an asset on the precise date that the court orders the divorce.  In those cases, spouses should value the asset as reasonably close to the divorce date as possible.  This happens, for example, when an appraisal is required to determine an asset’s value.

Determining Value

There are a few different valuation methods spouses commonly use in Connecticut divorces.  Often it is very easy to place a value on an asset, but sometimes it’s quite complex.  For example, the value of a bank account is its balance on a given day.  For other assets — such as a pension or a home — the courts ask what the “fair market value” is of the property.  The fair market value is the “price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”

Determining the fair market value depends on the nature of the asset.

Next Steps

To start making a plan for your divorce, reach out.  Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals.  We analyze those goals, plus the facts of your case, and present you with recommendations and options to move forward.

Schedule your Goals & Planning Conference today, or contact us either here or by phone at 860-560-8160.

 

 

Written by Meghan Freed