Some couples that are preparing for divorce in Pennsylvania have very little negotiation to do. They already have a marital agreement that outlines how they should divide their debts and assets. However, those without a written agreement will need to negotiate with their spouses to divide their property.
Pennsylvania is an equitable distribution state. The goal during property division proceedings is to find a fair way to share assets and financial responsibilities between two spouses. Property valuation often plays an integral role in asset division during a Pennsylvania divorce.
What does property valuation entail?
Property valuation is the process of establishing a fair market value for certain assets. Spouses must provide a comprehensive inventory of their holdings and assign a value to each asset. Often, property valuation is a process that requires expert advice. Too many couples make the mistake of focusing on the purchase price for assets. They fail to consider how certain property can appreciate in value. Proper asset valuation involves reviewing what similar assets are worth on the open market to determine what those assets are actually worth.
For example, people may need to work with an appraiser to determine what their home is worth given the current real estate market and the improvements they have made to the home since buying it. A valuation may also be necessary for a business. There are many different forms of business valuation that can look at factors ranging from the revenue the company produces to its physical assets.
The higher the likely overall value of an asset, the more worthwhile it will be for someone to obtain professional valuation services instead of simply estimating its worth. Even when someone does not want to keep a particular asset, they need to know its value in order to negotiate an equitable arrangement for their other assets.
Sometimes, each spouse will perform their own valuations on the biggest marital resources and then they will compromise and set a value in between those two figures. Those who do not take the time to properly value their assets may end up receiving less than a fair share of the marital estate because of that oversight.