Valuation of Assets – Property Settlement

September 27, 2018

Under family law, an initial step for parties in a divorce or separation who are seeking a distribution of matrimonial property, must clarify the assets owned by the parties and obtain a valuation of each asset. In the event that the parties cannot come to a mutual agreement on the division of property, a party may apply to the court for a decision. In such case, the court will base its decision on the value of the asset at the time of the trial rather than the value at the time of separation. This is because a considerable number of years may have passed from the date on which the separation began to the date of the trial, and a decision made based on the value of the asset at the time of separation may not be a valid (or fair) decision.

There are many cases where one party continues to live in a house that is a shared property even after separation, and either one continues to pay the loan. The value of real estate is usually on an upward trend, and the amount of net assets will increase according to the repayment of the loan. The court will issue a judgment taking into consideration what each party contributed to improve the value, such as maintenance of the marriage property, renovation, etc. after the separation. In this regard, in order to obtain a judgment that properly reflects each party’s contribution in the final judgment of property distribution, a party who continues to pay the loan after separation and strives to improve the value of the property should clearly record the details of his/her contribution which can be submitted as evidence at trial. Also, if one party contributes to the improvement of the value of matrimonial property after separation, he/she should also obtain an historical valuation so that the court can take into consideration the degree and importance of such contribution.

Reiko Reynolds
Lawyer
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