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Asset valuation is a key component to a fair property settlement

On Behalf of | Dec 2, 2015 | Property Division

Many assets can change value over time. People may know how much they paid for a specific item of real or personal property, but they may not know what that item’s current price would be in terms of present-day valuation. In Arizona, property values, investment portfolios and other asset valuations can fluctuate greatly given the presence or absence of certain economic factors.

Fluctuations in asset valuation can cause a great deal of trouble for people trying to settle property division matters. Whether a property division dispute arises as a result of a divorce or the dissolution of a relationship that involved cohabitation, individuals may have to prove what property is uniquely theirs, which items are shared and what items are under the exclusive ownership of their former partners.

Asset valuation involves establishing who purchased a particular asset or what type of asset was used to make the purchase. Often if one partner’s assets are used to buy something and the purchased item is not used by the other, the purchased item will stay in the ownership of the buyer. However, when partners comingle their funds to buy real estate, vehicles and other assets, their divisions can be more complicated to establish.

It also involves understanding how the value of the asset has changed over time. A home may be purchased for $200,000 and then 10 years later be valued at $300,000. During a property division dispute a couple may argue over who is entitled to the appreciation in the home’s value as well as who is responsible for any money owed on the subject property. Using an item of property’s initial or purchase value is not always a good way to determine its value at the time of a property settlement negotiation.

Attorneys who work in the divorce and family law fields recognize that coming to a fair property settlement agreement can be challenging. Many can help their clients understand the importance of asset valuation in the process. Failing to account for changes in asset values can leave one partner in the dark about the true value of his divided property.