Monetary compensation of property value to one of the spouses upon divorce

Division of property (equitable distribution)
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In the course of a marriage, couples often amass a substantial amount of shared property. When the decision is made to end the relationship, the pivotal question emerges: how to equitably divide the property acquired together.

As discussed earlier, the principles governing property division hinge on the recognition that marital property is a shared asset, warranting an equal split in the event of a divorce. This process can involve allocating specific assets directly. In cases where certain items cannot be physically divided, one spouse may be awarded the item, while the other receives monetary compensation representing the value of their share.

Crucially, the spouse receiving property held jointly is legally obliged, based on the court's decision, to compensate the other spouse for 50% of the property's value.

How does this unfold in practical terms?

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How to Accurately Determine Monetary Compensation?

Determining the correct monetary compensation can be tricky when it comes to jointly owned property between spouses, especially if the assets were acquired a long time ago at outdated market prices. Courts base their decisions on a fundamental principle – assessing the value of shared property at the time of its division, which is during the legal proceedings.

In this context, it's important to note that courts don't consider the conclusions of appraisal activities commissioned by either party involved in the legal dispute as valid evidence.

In a case from our practice, here's what happened:

The plaintiff prepared a counterclaim and included a report from an appraisal entity. However, the court dismissed these reports because the entity hadn't been forewarned by the court about potential liability for presenting false conclusions. This situation introduces various risks:

  • The independence, lack of bias, and impartiality of the appraisal entity aren't guaranteed, given that it was commissioned by an interested party.
  • There's no assurance of the reliability of the provided information, as the appraisal entity bears no responsibility for its assessments.
  • The report from the appraisal entity isn't considered a procedural document as outlined by law.
  • The appraisal entity conducting the assessment isn't recognized as a procedural party capable of influencing the formation of the evidentiary base.

The court disregarded the findings of the appraisal entity's report. Instead, it granted the opposing party's request to appoint an independent judicial appraisal of all jointly acquired property. 

Consequently, when gearing up for the court-ordered division of assets, there's little sense in independently procuring and conducting an assessment of jointly acquired marital property outside the legal proceedings. Such evaluations won't be considered by the court anyway.

We propose the following action plan:

  • Analysis of your situation.
  • Document review.
  • Establishment of a legal position.
  • Assistance in evidence collection.
  • Drafting a well-structured lawsuit.
  • Submission of a motion for the appointment of a comprehensive assessment of all jointly acquired marital property when necessary.
  • If required, preparation of additional motions.
  • Legal representation in court.
  • Obtaining a court decision.
  • Implementation of the court decision.

The division of marital assets during a divorce involves numerous details, and being well-informed is crucial to avoid wasting time and resources without achieving the desired outcome. 

Our specialists leverage 15 years of experience to provide guidance tailored to your needs.

Check out the cost of equitable distribution services here.

Publication date: 26/10/2023

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