Residents of Connecticut who are contemplating ending their marriages have a number of concerns. Except for the custody and support of minor children, the most important issue is the division of marital assets. Couples without significant assets can often reach an agreement on the division of their assets by negotiating the division themselves. However, couples with a significant amount of assets may need outside assistance to reach a fair division. For such couples, the use of an appraiser can be extremely useful.
How do appraisers value property?
Professional appraisers are trained to provide a reliable estimate of value by determining how much a willing buyer will pay to a willing seller for a given asset, that is, the fair market value. The appraisal method may vary depending upon the type of asset being valued. Appraisal methods usually fall into one of three categories.
Value of income stream
If the asset is an income producing property, such as an apartment house or manufacturing facility, the appraiser will endeavor to estimate the income stream that the asset will generate over a reasonable length of time and then discount the income stream to present value by applying a reasonable rate of interest.
Some assets, such as an automobile or boat, can be valued by estimating their replacement value. The appraiser will gather information about the price of similar assets and set a value on the asset owned by the couple.
Neither of these methods work well for what is usually a couple’s most valuable asset, their home. Houses generally do not produce a significant income stream, and replacement value is generally too low to be useful. Appraisers will use the comparable sale method. After inspecting the house, the appraiser will search public records for sales of houses with similar features. Using established appraisal techniques, such as determining usable square footage, unusual features such as swimming pools or tennis courts, the appraiser will prepare a report setting out the estimated fair market value.
What if separating spouses don’t agree
If the couple cannot agree on a fair division of their assets, the case will almost certainly go to trial so that the judge can divide the assets (and resolve any other unresolved issues). A professional appraiser may be required to testify in court as an expert witness. Anyone who is concerned about receiving a fair share of the marital property may wish to consult an experienced divorce attorney for an estimate of how the assets will be divided and whether using an appraiser would be a beneficial strategy.