If you’re one of our more frequent readers, then you know that the distribution of property during a divorce here in Maryland is done using equitable distribution rules. Despite its title, equitable distribution doesn’t necessarily mean an equal 50/50 split. The rule instead bases fairness on the value of marital property, splitting it fairly between spouses.
But the valuation of certain items can be tricky, especially if their appreciation and depreciation rely on external factors in the market. What might be worth $10,000 today, may not be worth that amount 10 to 15 years down the road. This begs the question:
How do Maryland judges account for property that appreciates?
As you may not know, appreciation of items comes in two forms: active appreciation and passive appreciation. While the former occurs because of contributions or efforts by an individual or a married couple, the latter is entirely contingent upon external forces within the market, such as supply and demand or inflation.
Maryland judges take these forms of appreciation into consideration when determining which marital property should go to which spouse. Judges rely on property assessments provided by skilled financial experts too, distributing property fairly and equitably.
But as some of our Columbia readers may already know, the valuation of marital property now doesn’t always give an accurate prediction of worth down the road. That’s because most valuation is based on what someone would pay now or shortly down the road. When external factors are at play though, the value of an item can change dramatically in a matter of years, such as was the case with Beanie Babies in the 1990s.
The fact that an item’s value can change over time is worth keeping in mind and talking to a skilled family law attorney about. By asking a lawyer about this sometimes applicable part of the divorce process, you learn more about your rights and how best to get the fairest distribution of your marital property too.
Source: The Huffington Post, “Understanding How Assets Get Divided In Divorce,” Jeff Landers, June 14, 2013