If you are going through a divorce, one of the first things you may be concerned about is how your assets will be divided. Will you get to keep the house? Will your spouse be entitled to any part of your business? The valuation of marital assets is a vital part of this process. These are big questions, and we will do our best to answer them here. Because it can be easier to understand these concepts in application, we will be applying the facts about the Schaumburg couple that we covered in one of our recent blog posts. If you didn’t read it, don’t worry — we will recap the relevant facts here.
What is Equitable Distribution?
Illinois is an equitable distribution state. This means that instead of dividing everything 50/50 as some states do, courts will use a variety of factors in order to determine what a fair division of assets would be. The first step is determining what property is separate and what property is community or marital property. Only marital property can be divided between spouses for the purposes of equitable distribution. Marital property is generally any property or assets acquired during the course of the marriage. In order to have these assets considered, however, they must be submitted to the court with a valuation of their fair market value (i.e. what a buyer would actually pay today for the asset). If you submit an asset as marital property it will not be considered by the court at all unless it is accompanied by a value, as the court does not have the power to estimate or assign value. These values are generally determined by an experienced appraiser.
Valuation of Assets for Our Model Family
The couple in question has a number of assets that may constitute marital property. We will examine these assets and the importance of their valuation below.
Property
The couple owns an expansive five-acre property in Barrington on which their family home and a large pool are built. It is important for them to have the property appraised in order to determine its current fair market value. The value will be necessary regardless of whether the home is sold or kept by one spouse. If one spouse keeps the home, they may have to reimburse the other spouse for the fair market value of half of the home, or allocate an equivalent amount of assets to the other spouse.
Gifts
You may think that gifts would be separate property, but gifts exchanged between spouses during the course of a marriage are generally considered community property. The husband in this scenario showered his wife with lavish and expensive gifts during the course of their marriage. Any tangible property that was gifted, such as jewelry, should be valued by a qualified appraiser and considered in the distribution of property.
Business
The husband in our model family has a successful electrical contracting company that he has built up over the course of their marriage. Whether that business will be considered marital or separate property depends on a number of factors, such as whether the business was established prior to the marriage, if marital assets have ever been used for business purposes, and if his spouse had an active role in running or supporting the business. Even if the business is separate property, the value is important as an increase in value over the course of the marriage may still be considered for the distribution of assets.
Contact Glasgow & Olsson
Divorce may feel like a daunting process, but you do not have to navigate it alone. If you need representation for a divorce or child support matter in Cook County, Glasgow & Olsson is here to help. When you need an attorney, experience matters. Contact us today to learn how our experience can get you the results you deserve.
Link to part 1 of the series The Model Family