What Is Asset Valuation
Asset valuation is the process of determining the fair market value of property, accounts, and other financial interests owned during your marriage. This valuation becomes the foundation for property division in divorce proceedings. Every state requires courts to identify and value marital assets before dividing them, though the division itself follows different rules depending on whether you live in a community property or equitable distribution state.
What Gets Valued
Asset valuation covers far more than a house and bank accounts. You'll need valuations for:
- Real estate, including primary residence and rental properties
- Retirement accounts (401k, IRA, pension plans)
- Investment accounts and brokerage holdings
- Business interests and professional practices
- Vehicles, equipment, and collectibles
- Stock options, RSUs, and deferred compensation
- Life insurance cash surrender values
The valuation date matters significantly. Most states use the date of separation or the date the divorce petition was filed. In some cases, courts use the trial date. This timing can affect valuations substantially, particularly for volatile assets like stocks or real estate in fluctuating markets.
Who Performs Valuations
Simple assets like bank accounts and publicly traded stocks can be valued from statements and market prices. Complex assets require professional appraisers or expert witnesses. Common valuers include:
- Licensed real estate appraisers for residential and commercial property
- Certified business evaluators (CVA) for company valuations
- Forensic accountants for hidden assets or complex financial structures
- Pension actuaries for defined benefit plans
Many attorneys recommend hiring a neutral expert agreed upon by both spouses to reduce costs and conflict. If you can't agree, each spouse may hire separate experts, and courts will weigh both valuations.
Impact on Spousal Support and Division
Asset valuations directly affect both the division of property and calculations for spousal support or alimony. In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin), marital assets are divided 50/50 by law. In equitable distribution states (the remaining 41), courts divide assets fairly but not necessarily equally, considering factors like earning capacity, length of marriage, and contributions to the marriage.
The total marital estate value also affects spousal support duration and amount in many states. States like California use formulas that calculate support based partly on the income available after accounting for asset-related expenses and income.
Common Questions
- Do I need professional appraisals for everything? No. Liquid assets with clear market values (cash, stocks, bonds) don't need appraisals. Real property and business interests almost always do. Your attorney can advise on which assets require formal appraisals based on complexity and value.
- What if my spouse hides assets? Forensic accountants can uncover hidden accounts, understated business income, or transferred assets. Discovery rules in divorce require both spouses to disclose assets under oath. Hiding assets can result in sanctions, attorney fee awards, or unfavorable judgment outcomes.
- Can we use our own valuations? Yes, if both spouses agree to the valuations and sign a settlement agreement reflecting those values. Courts accept stipulated valuations without requiring expert testimony, which saves significant time and money.
Related Concepts
- Property Division - how courts distribute the valued assets between spouses
- Appraisal - the formal process for determining real estate and business values