The Importance of a Home Appraisal During Divorce

by clarkwoods

The Importance of a Home Appraisal During Divorce

When a married couple is going through a divorce, if there is jointly owned property, an appraisal will almost always be required to determine how to divide the assets after the divorce is final. There are professional appraisers to evaluate property, as well as any and all other types of possessions the couple may own.

The law(s) regarding division of property and assets is state specific. Many people believe that all assets will be equally divided between spouses in a divorce process, but in fact, this is not necessarily true. There can be many mitigating circumstances that affect the actual asset division. Some circumstances to be considered include:

Was the property owned by one partner prior to the marriage?

Was the property a gift or inheritance to one spouse during the marriage?

Was the property acquired with funds that one partner brought into the marriage?

Was a pre-nuptial agreement signed prior to the marriage?

How was title taken to the property in question?

Has the asset increased in value since purchased? Was the increase due to an equal investment of time and funds by both spouses?

Is the asset part of a business owned and operated outside the marriage?

Was the business in operation prior to the marriage?

It is important to seek legal advice prior to ordering an appraisal. While some states use the date of separation as the appropriate date to determine values for asset division, other states may deem any valuation is premature until closer to the finalization of the divorce.

Appraisals should be completed by a certified or licensed appraiser. When real estate type of property is to be valued, it is prudent to utilize the services of a local appraiser who is familiar with local valuations, assessments, etc. Your attorney or CPA can usually recommend a good appraiser for you.

If there are investment properties and/or commercial real estate involved, you may need to obtain the services of more than one appraiser. For assets other than real estate, it is very likely that the services of at least one more appraiser will be required. For example, few appraisers are qualified to appraise antiques, artwork, or jewelry.

Surprisingly, it is not uncommon for non real estate types of assets to exceed the value of real property, and certainly since the more recent drop in housing values, the amount of equity in real property. When you start to consider automobiles, boats, motorcycles, expensive bicycles, jet skies, snow equipment, business equipment, cameras, motor homes, china, silver, collectibles, jewelry, pensions, and retirement plans, you can see that property division is not a topic to be taken lightly, especially if the marriage has been of long duration.

In 2008, the Uniform Standards of Professional Appraisal Practice (USPAP) was formally adopted across the United States. The USPAP established a uniform set of regulations regarding education, testing, licensing and certification for all property appraisers in the country. The USPAP sets the standards for real estate, personal property, business and mass appraisal. However, licenses and certifications are still issued by each state.

Before you hire any appraiser to value any of your property, be sure to ask to see a copy of the state issued license, and a copy of the E & O insurance, which protects you in case of errors.