State laws help ensure that both spouses have baseline protection during divorce proceedings. Specifically, the law requires an equitable or fair distribution of marital property. People preparing for divorce need to review their financial records, determine what assets are part of the marital estate and then prepare to negotiate a settlement with one another.
Major assets can easily become a stumbling block during that process. Spouses may disagree about the need to divide those resources. Certain high-value assets, such as the marital home, are often retained by one spouse, while the other receives assets of comparable value or possibly a portion of equity withdrawn when the spouse keeping the home refinances.
The fair market value of the home has a profound impact on the overall distribution of property. The spouse staying in the home may insist that the fair market value for the home is lower than the spouse seeking a payout for their share of equity. Who ultimately decides what valuation is appropriate?
Judges may settle property disputes
Ideally, spouses can work with one another to compromise on key property division terms. They may need to negotiate about who stays in the home and how they address the equity that the other spouse should receive. They may even need to negotiate regarding the fair market value set for the property.
In cases where the spouses disagree about what the home is worth, they may need to hire an appraiser. Appraisers can help establish a reasonable fair market value given the condition of the home and the sale price for similar properties in the area. In scenarios where spouses may even question the report produced by appraisers, they may choose to each hire their own appraiser. If the appraisal reports return significantly different fair market values, the spouses may agree to split the difference.
If they truly cannot compromise regarding the home value and the division of the equity accrued in the house, then the matter may require a judge’s review. Family law judges can decide who retains possession of the home and how to balance home equity with other property division terms. They can settle disputes about the value of the home by reviewing appraisal reports or documentation from real estate professionals.
Ensuring an appropriate valuation for major marital assets is critical for an equitable property division outcome. Spouses facing disputes about asset valuation may need help developing their positions for property division litigation.