How Do Florida Courts Determine the Value of Marital Assets?
Most divorcees do not fully understand how their marital assets are valued in a divorce. Valuation of assets is an essential part of the property division process to ensure that assets are equitably distributed between the spouses.
Depending on the method used to appraise the value of marital assets, the final worth of assets can catch many divorcees off guard. When parties do not agree on the valuation of assets in a divorce, they may end up creating unnecessary disputes, which can further complicate the divorce process or turn it into a contested divorce.
Marital Assets That Are Valued by Different Appraisal Methods
Florida courts use a variety of appraisal methods to determine the value of assets in a divorce:
- Real property. Any houses, homes, apartments, commercial real estate, and land are considered real property and are valued according to its Fair Market Value (FMV). FMV is an appraisal method used to determine the value of an asset based on the price a potential buyer is willing to pay for it on the market.
- Personal property. Any personal property that cannot be considered real estate (e.g., motor vehicles, jewelry, furniture, etc.) is valued according to its Fair Market Value. Personal property can also be evaluated through the cost of replacing the item (the so-called “replacement value” method).
- While many choose to determine the value of divorcees’ businesses via the FMV method, the method cannot apply to businesses that are not subject to listing on the market. Alternatively, such businesses can be valued based on the total worth of their physical assets if the company was sold at the time of divorce (the “liquidation value” method).
- Paid time off. Typically, Florida courts calculate the value of unused paid sick leave or vacation time for equitable distribution in a divorce.
- Retirement benefits. In Florida, courts determine the value of retirement benefits based on the value of vested interests at the time of divorce, excluding any amounts attributed to post-divorce contributions.
The Date of Valuation Matters, Too
Typically, Florida courts consider the present value of marital assets on the date the divorce was filed. However, in some cases, parties can choose the agreed-upon date for valuing assets. That date must be specified in their divorce settlement or marital agreement.
When it comes to the date of valuation, Florida law allows courts to exercise broad discretion. Often, Florida courts value marital assets on a date that is fair and equitable based on any relevant and unique circumstances in a particular case.
For example, the court may choose to value retirement benefits on the date they vest, though it would deduct a spouse’s contributions to the retirement account after the divorce and before the benefits vest. This appraisal method is called “deferred distribution” and is applicable when the equitable distribution of certain assets occurs at a future date after the divorce is finalized.
The existence of various appraisal methods in the valuation of marital assets makes the process of determining the value of assets in a divorce confusing, which is why you should talk to an Orlando property distribution attorney to discuss how assets will be valued in your particular case. Speak with results-driven lawyers at Law Offices of Steve W. Marsee by calling at 407-521-7171.