We all know assets get divided in a divorce. That is step two in equitable distribution. The first step is putting a value on all the assets. That is where appraisals may come into play.
When it comes to real estate, an appraisal may be in order. However, a practical tip before spending hundreds of dollars on an appraisal is simply to see whether you and your spouse agree on the value. Stranger things have happened. Sometimes parties cannot agree to a value but can agree to hire an appraiser jointly. If you are selling the house, you probably do not need an appraisal given that you will be dividing the proceeds and not placing a value on the asset.
Business interests almost always need to be valued. I will talk about business valuations in a future blog post.
When it comes to personal property, it is often overlooked that we look at the fair market value the asset. In other words, the amount a willing buyer would pay to a willing seller in an arm’s length transaction. Put simply, fair market value is not replacement value.
If you have an insurance rider for your jewelry, in all likelihood the values are the replacement values and not the fair market value. You can get the jewelry appraised to determine the fair market value if the dispute about the value is significant.
Clients who move out without taking any furniture are often disappointed that we use fair market value and not replacement value for the furniture too. Imagine dragging your $10,000.00 dining room set onto your driveway and seeing what you could get for it. Unless it is a rare antique or has some collector’s value, you will be looking at a value in the hundreds, not thousands. That said, there are appraisers that will come to your home and value your furniture, artwork and antiques. We can even appraise wine collections and sports memorabilia.
Deciding whether and when an appraisal is needed is a decision best made with your attorney. If you have questions, here is how to get started. Also read about what to expect at an initial consultation.