How is Property Valued in a Divorce?
Connecticut courts need to divide property between spouses in order to finalize a divorce. To understand how property division works, you need to understand how property is valued in Connecticut divorces.
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.
- Definition – whether an item meets the definition of property
- Valuation – what is the value of the property
- Distribution – how the property will be distributed between the spouses
Today’s topic is the second category, how to value 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.
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.
The Comprehensive Connecticut Property Division Guide
How to divide property is one of the most important issues in divorces. And, it’s one of the most confusing. There are no set formulas or rules on how property will be divided. The good news is that creates tremendous flexibility for experienced divorce attorneys to craft an individualized approach. In order to prepare to make solid and informed decisions, you need to understand how property division works. Our Comprehensive Connecticut Property Division Guide tells you everything you need to know about property division in Connecticut. Read: Property Division: The Comprehensive Connecticut Guide
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.