Valuation of Property in an Illinois Divorce: Assessing and Proving Property Value
During a divorce, one crucial issue that often arises is the valuation of property.
In Illinois, the division of property in a divorce is based on the principle of equitable distribution. This means that marital property should be divided in a manner that is fair and equitable (not equal), taking into consideration various factors such as the duration of the marriage, each spouse’s contribution to the marital estate, and their respective needs.
To achieve a fair division, it is crucial to accurately assess the value of the property before it is divided. Proper valuation ensures that each spouse receives their fair share of the marital assets, and helps prevent any unfair advantage or disadvantage during the distribution process. By valuing the property accurately, the court can make informed decisions that promote an equitable outcome for both parties involved.
In this article, we will explore the various methods of determining property value in a divorce case and highlight the importance of obtaining professional assistance from a skilled Family Law attorney.
Understanding Property Value Assessment
When it comes to determining the value of a property, it is crucial to remember the age-old adage, “Something is worth only what someone else is willing to pay for.” Simply relying on personal beliefs or online research may not suffice as evidence to establish the property’s value in court. Therefore, it is necessary to employ appropriate valuation methods that are widely recognized and accepted.
Methods for Proving Property Value in a Divorce
The most ideal and cost-effective approach is when both parties mutually agree on the value of the property in question. Once an agreement is reached, the focus can shift to the division of the property.
Agreed Method for Disagreement:
In situations where the parties have differing opinions on the property’s value, a compromise can be reached by meeting in the middle. For example, if one spouse believes the item is worth $300 while the other believes it is worth $100, a middle ground of $200 can be agreed upon. Once the value is established, the division of the property can proceed.
This method is employed when both parties desire a specific property, such as a house, and traditional division is not possible (e.g., splitting a bank account). In such cases, the parties agree that one spouse will set a price, and the other spouse will decide whether to buy out the first spouse or sell the property to them. This method ensures a fair settlement when both parties wish to retain the property. If an agreement cannot be reached through this method, the decision may ultimately lie in the hands of the judge.
Battle of Experts:
When all settlement options have been exhausted, and disputes persist, the judge will be required to make a decision. In such instances, presenting evidence from expert witnesses is often necessary to aid the judge in determining the property’s value. While this approach may lengthen the process and increase costs, it becomes an essential option when dealing with an unreasonable spouse.
Determining the Date to Evaluate Assets in an Illinois Divorce
In an Illinois divorce, the value of assets is typically determined on the date of the trial, a stipulated date as agreed by the parties, or a date as close to it as possible. However, figuring out the exact value of assets can be challenging. This can be due to unexpected changes, like when the trial date gets postponed at the last minute, or because certain assets, such as stocks, can vary in price depending on the market.
To make things simpler, the divorcing parties can agree on a specific date (“stipulated date”) for evaluating the assets. For example, if they have a mutual fund, they might use the most recent quarterly statement to determine its value.
By agreeing on a specific evaluation date, the divorcing couple can reduce uncertainties and make the process of dividing their property smoother. Both parties need to consult with their attorneys to make sure the chosen evaluation date is fair and complies with the law.
Determining the Value of Assets in an Illinois Divorce
When it comes to valuing assets in an Illinois divorce, certain factors can make the process challenging. Let’s take a look at a few examples:
- Real property: Valuing a house can be tricky because it depends on various factors, such as market demand and the prices of similar properties. If both parties plan to sell the house and split the proceeds, they might agree on a price with the help of a real estate agent.
However, things can get complicated if one person wants to keep the house. The person who wants to keep it may want a lower value to receive more marital assets, while the other party may want a higher value to retain their fair share. In such cases, there is not one approved way to determine the value. The parties will either need to agree upon a value or they will need to convince the judge using expert testimony at trial. When attempting to reach an agreement or prepare for trial, a professional property appraiser might be needed. If the couple can’t agree on one appraiser, each party can choose their own, and those two appraisers can select a third one. The average value of the three appraisals can then determine the home’s value.
- Business interest: If either spouse owns or is involved in a business, its value must be determined. Factors like inventory, cash, revenue, and goodwill are considered during business valuation. The valuation method can vary, such as assessing future income or comparing it to similar businesses. An experienced business appraiser is essential for accurately valuing the business.
- Stock portfolios: The value of stocks can change drastically on a daily basis, making it challenging to determine their worth at trial. However, monthly or quarterly statements provided by stock portfolios can help assign a value to these assets in anticipation of the trial.
- Retirement assets: Retirement accounts usually issue statements on a regular basis such as quarterly or annually, allowing for a determination of their value before the trial. However, certain retirement assets like 401(k) plans, profit-sharing, and pension plans require a qualified domestic relations order (QDRO) for division.
Seek Guidance from a Knowledgeable Family Law Attorney in Illinois
Given the complexity of property valuation in divorce cases, it is strongly advised to seek prompt assistance from an experienced Family Law attorney. At Reidy Law Office, our team of skilled professionals can provide invaluable guidance and representation, ensuring that your interests are protected throughout the process. Contact us today to address any questions or concerns regarding the valuation of property in your divorce case.