When a couple divorces, one of the most important steps is figuring out how to divide their property. Property division in Kentucky is about classification first, valuation second, and equity last. Thus, before a family court can determine what an equitable division looks like it must assign a value to each asset. Whether you are dealing with marital assets, non-marital property, or something that has been commingled over time, knowing what everything is worth is essential to reaching a fair settlement or preparing for trial.
Some assets are very straightforward. For example, checking or savings accounts, investment portfolios, or retirement funds typically have a clear value that can often be determined by reviewing recent account statements. It is often prudent to review multiple statements to see if the account balance changes over time from during the marriage to the date of separation to the current value at the date of any mediation, hearing, or trial. Often this method is also used for valuing debts, such as credit card balances or personal loans.
You can discuss with your attorney if it makes sense to speak with a forensic accountant if you are concerned about hidden assets or unclear financial records. Forensic accountants can dig deep into the numbers including tracking down off-the-books income, identifying questionable transfers, and verifying the legitimacy of debts. Forensic accounting is especially helpful when one spouse handled all the finances during the marriage and there are suspicions that not all assets are being disclosed.
There are some assets that may necessitate an appraisal if there is no consensus about the value of the asset. Homes and other real estate may need to be appraised by a licensed appraiser to assess the fair market value based on the condition of the property, comparable sales in the area, and market trends. Zillow estimates or property tax assessments are generally not enough for court purposes but might help to develop an agreement regarding the value of an asset if the parties want to avoid the cost of an appraisal.
Similarly, furniture, vehicles, collectibles, and other household goods or personal items are valued based on their current fair market value and might require an appraisal. In many cases, parties agree on the value of smaller items, but for high-value items like special collections, jewelry, art, or luxury vehicles, a professional appraisal may be needed.
If either spouse owns a business, it will likely require a less formal calculation of value or more formal business valuation. Business valuation experts consider a range of factors, including the business’ assets and liabilities, its earning history, future growth potential, and even the industry outlook. A professional valuation ensures a fair and accurate picture of what the business is truly worth.
An incorrect or incomplete valuation can lead to an unfair settlement or require costly litigation to fix later. Working with experienced divorce attorneys, financial professionals, and appraisers helps ensure that all assets are properly identified and valued so that each spouse receives their fair share.
If you are facing a divorce and have questions about how your property will be valued, our team is here to help guide you through the process. Contact us today to schedule a consultation.