Why valuation is critical during a divorce

Divorce can be a complicated process for a California couple, particularly when the partners own a variety of tangible and intangible assets. When two people decide to end their marriage, they must assess the classification of their property as either community property or separate property. Most of the property that couples amass during their married years will end up being community property, but items that are owned exclusively by one partner may be classified as separate property.

Community property is often divided between the divorcing parties in a manner that is relatively even. That means that the value of each share of the community property that each party takes from the marriage is about the same. However, if the property subject to division during a divorce is not accurately valued, one of the parties may not receive a fair share of the assets they owned with their ex.

Asset valuation is the process of determining the worth of an item in monetary terms. For example, a sports car may have a monetary value of $150,000 even if one partner to a marriage finds it useless and the other feels as though it is intrinsically priceless. Monetary values can be used to balance a property division settlement or order and therefore must be accurate in order to be fair.

Under California law, asset valuation generally must happen as close to the date of the relevant hearing as possible to ensure a fair valuation at the time the property division process occurs. Attorneys who represent parties in high asset divorces and who are familiar with asset valuation and forensic accounting can assist their clients with ensuring the fairness of their property division outcomes.

Moving forward after a divorce is important, and no one wants to have to revisit questions of property valuation once their divorce decrees are formalized. Legal help can benefit individuals working through property questions and who require specific guidance with their unique divorce needs.