Divorce In PA - Dividing Personal Property & How We Can Help
Those who handle matrimonial law know that the division of personal property can be one of the most testing and contentious problems in any divorce settlement. Even common household objects without great value can become missiles charged with extreme emotion and sentimentality, used to claim unrealistic worth in combat with their spouse, often not meeting the legal charges rendered by council.
The best way to avoid intense confrontation is to nip it in the bud. Having a professional appraiser to value the marital property is both wise and efficient. According to PA law, property being valued for divorce must be done according to fair market value. This is not defined specifically but generally follows the guidelines of the IRS Treasury Regulations used in estate and donation valuations (1.170A-1©2 and 20.2031-1(b). It includes the following ingredients:
a. A willing buyer and willing seller,
b. Both under no compulsion to buy or sell,
c. Acting at an arm’s length in open market,
d. Both having reasonable knowledge of the facts.
This is basically the same definition as listed in The International Glossary of Business Valuation Terms. At least 34 out of the 50 states use fair market value for divorce (68%), although New Jersey is one that does not. It uses something their courts call “fair value.”
Pennsylvania is an equitable distribution state which means that the assets are divided based on a judge’s determination of what is fair under the circumstance (PA C.S.A. Title 23). However, the property values provided to the judge must be based on fair market value. (Real property normally uses the concept of “market value” but equates it to FMV.) The effective date of the valuation is usually set as the date of separation unless another date is stipulated. In some instances, the appraiser must provide current values and some retrospective values, if the property was gained during marriage but at an unknown amount.
Items acquired by gift or held prior to marriage can be excluded from any inventory or itemized without amounts. Each side can prepare lists and make them available to the appraiser. Rather than have each side choose their own appraiser and then fight over the two results, often requiring an umpire or third party, the parties can agree to hire an appraiser to do the contents and submit results to both parties, splitting fees in half, agreeing to abide by the results. A qualified appraiser should be one that is independent and impartial, showing no bias to either side. (A professional appraiser is never an advocate.)
Appraisal standards are set by the Uniform Standards of Professional Appraisal Practice (USPAP). Insist that any appraiser be experienced in both methodology and current markets. They should prepare their reports in compliance with USPAP, which includes a signed certification. The reports should be done room by room with a complete itemization and fair market values (not replacement costs or forced sale values). The report should contain good descriptions and a justification for the amounts determined. (You should be able to understand how the appraisal process was done and how the amounts were determined.)
A good appraisal should eliminate any unrealistic claims from both sides. (Believe me, each side will have unrealistic claims.) It should be objective, fair, and accurate. If necessary, the appraiser could be called to court to answer any questions.
Occasionally the marital couple still cannot reach a settlement. In those instances, an auction company can be used to sell the assets and have the proceeds distributed accordingly. (Either party could be allowed to attend the auction and buy whatever they desire in competitive bidding.)
An auction firm like Alderfer Auction has the expertise, experience, and temperament to handle these emotionally charged situations with integrity, independence, and compassion. Let us help make your life better!