Common Valuation Issues in Property Division

When dividing property in a Texas divorce you generally use a spreadsheet and fill in values for the major assets and debts.  Then you work on splitting up those assets and debts between the parties to arrive at the percentage split you are seeking.  Sometimes this is 50/50, sometimes it is disproportionate in favor of one spouse or the other. So mechanically it is a fairly straight forward process.  The issues that arise most often are when the spouses disagree over the value of an asset.

Dispute Over Real Estate Value

For example, the parties might agree that wife will be awarded the house and husband will receive an offset by being awarded a larger share of some other asset, like a 401k.  However, wife and husband may not agree on what the asset is worth. If wife says the market value is $400,000 and husband believes it is closer to $500,000, then that is a problem. With real estate this is normally resolved by one or both parties hiring an appraiser and having an appraisal done.  If either spouse is being completely unrealistic an appraisal will usually clear this up.   Sometimes two appraisers may disagree on a value, but the range will be much smaller.

Valuation of a Vehicle

You can have similar issues with vehicles but obviously the numbers are a lot smaller than they are with a house. Thus it is a lot more likely that this issue can be compromised on.  For vehicle valuation issues it is quite easy to get an free online valuation done on edmunds.com or Kelly blue book.

Valuation of a Business

When the parties directly own a business or an interest in a business this is a much more complicated valuation issue.  Usually this requires a business valuation expert to analyze the business and its financial records and prepare a valuation report.  While there are definitely industry standards and ratios used in the evaluation and preparation of the report there are also a number of assumptions that are required to be made.  This can result in a much broader range of reported values for a given business. Since a business is much more difficult to liquidate than a piece of real estate or an investment account, a large difference of opinions in a business value can make a case very difficult to resolve without trial.

These are some of the more complicated property division issues that arise in divorce cases.  But even in cases that have these issues the usual barrier to getting a case settled is the same as in most cases – heightened emotions of the parties.  Once this can be overcome, the parties are usually able to reach a compromise and resolve the case.

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Scott Morgan is Board Certified in Family Law by the Texas Board of Legal Specialization. He has practiced family law since 1994 and is the founder of the Morgan Law Firm which is dedicated exclusively to representing divorce and family law clients in the Houston and Austin areas.

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