Couples with valuable assets often have a more difficult time navigating divorce proceedings than those with minimal property. The process of negotiating asset division terms can take months to complete. Spouses have to decide who retains which assets, what property they need to liquidate and how to delegate responsibility for any shared financial obligations.
In some cases, spouses may struggle to reach an agreement with one another. They may need to go to court to have a judge decide how to separate their financial interests. Real property holdings could include the marital home and vacation homes, as well as investment properties. Each piece of real property can be worth hundreds of thousands of dollars, and the value attached to the property can have a profound impact on the distribution of other assets and marital debts.
Who determines the fair market value of real estate during a divorce?
The spouses can agree on an appropriate value
In an uncontested property division scenario, spouses settle their own disputes. They may agree to hire an appraiser or to work with a real estate agent to estimate the current fair market value of their home and other real estate holdings.
After they agree on values for their real estate holdings, they can then negotiate terms for possession of the properties or arrangements for sharing the proceeds after they sell specific holdings. So long as they agree, they can retain control over the process.
Judges can settle valuation disputes
Sometimes, spouses find it nearly impossible to agree on what their assets are worth. The spouse hoping to retain real property may undervalue it, while the spouse seeking a buyout might overestimate the fair market value of real property.
In cases where spouses do not agree on the valuation, they can each present information to the courts, such as an appraisal or an assessment performed by a real estate agent. A judge can then review the documentation and make a determination regarding the value of the property and how to integrate it into a fair property division settlement.
Setting a value for key marital assets is a critical step when preparing for divorce proceedings. Spouses with high-value marital estates can anticipate more complicated property division negotiations, as they have more details to resolve.
