One of the largest parts of any divorce process is the division of marital assets. In Illinois, judges divide the assets equitably, based on a variety of factors, including, but not limited to the following:
- spousal contribution to the marital estate;
- debts of the parties;
- age of the spouses; and
- tax consequences, among other things.
One important part of property division in divorce is the accuracy of asset valuation. This can have a large impact on how assets are divided because a mistaken asset valuation can lead to a judge’s incorrectly deciding what would constitute as equitable division.
For many assets, valuation is a simple, straightforward process. Items such as bank accounts and life insurance policies have readily accessible cash values that courts can use to make their decisions. The issue of value becomes less clear though, if the spouses have more complex assets, such as private corporations, stock portfolios, or real estate. These assets often exist without readily accessible markets to judge their worth, or have such rapidly changing value that getting a consistent estimation of their worth can be difficult.
Many different types of assets fall into the first category of lacking markets capable of easily determining their value. The most common asset for which the issue arises is the couple’s home. Since each piece of real estate is unique, finding a fair value for it can sometimes be challenging. Some couples also have rare antiques, unique pieces of art, or expensive jewelry that may be difficult to value. High-asset or high-net-worth divorces can also introduce other complicated forms of property that the court will need to divide. For instance, couples who have interests in private, closely-held corporations will need to figure out the proper market value of those interests.
Expert Testimony in the Division of Assets
Courts sometimes choose to solve these valuation problems through the use of expert testimony. The spouses’ lawyers will find witnesses who are experts in valuing the specific type of asset in question. These experts will examine the asset in question and use a variety of techniques to estimate its value. The techniques used will vary dramatically, depending on the specific type of asset. Home appraisal may involve looking at recent sales of comparably-sized homes in the neighborhood, while business valuation can involve calculating the value of all the business’s assets, along with its revenue streams.
Assets with Changing Values
To deal with the second category of assets, those with rapidly changing values, the court will often pick a specific date to use as the reference point. While this date generally applies to most of the assets in the divorce, it often has the largest impact on things like stock portfolios, which can occasionally see noticeable changes day by day. In Illinois, the law states that the valuation date should be the time of the trial or a date as close to it as is practicable.
If you are interested in filing for divorce and believe you have complicated assets to value, contact an Illinois divorce lawyer today. An experienced lawyer can help you achieve the most equitable distribution of the marital property.