What Happens When Spouses Disagree on Property Valuation?
In a Massachusetts divorce, determining the value of marital property can become one of the most contested parts of the process. Disagreements over the value of a home, business, investment, retirement account, or other substantial asset can directly affect how property is divided. When spouses cannot agree, or there are disagreements over other matters, these issues may become more entrenched, and the divorce may need to proceed to litigation.
Why Does Property Valuation Matter?
Massachusetts courts divide marital assets based on the circumstances of the parties and the factors set out in Massachusetts General Laws Chapter 208, Section 34. Before a court can fairly consider the division of property, however, it may be necessary to establish what particular assets are worth.
That sounds straightforward, but valuation can become complicated quickly.
For example, spouses may disagree about the value of the marital home because they have different views about its condition, comparable properties, or the appropriate valuation date. A privately held business may bring additional complications. Often the value of these businesses depend on future earnings, goodwill, or the involvement of one spouse.
Other assets may raise specific valuation questions, including stock options, professional practices, pensions, collectibles, and investment accounts.
What Happens When the Value Is Disputed?
In a contested divorce, each spouse may present evidence supporting his or her position. This can include appraisals, financial records, tax returns, business records, expert reports, and testimony from qualified valuation professionals.
Where the parties have obtained different appraisals or expert opinions, the court may need to evaluate the methodology and evidence behind each valuation. Attorneys may question the assumptions used by an opposing expert and challenge whether a particular valuation accurately reflects the asset’s value for purposes of the divorce.
The valuation dispute can therefore become part of the broader litigation process, potentially requiring discovery, expert testimony, depositions, and ultimately a hearing or trial.
It is also important to consider what date should be used to determine an asset’s value. Depending on the circumstances, changes in value during the divorce may become an important issue. The applicable valuation date can affect the parties’ financial positions substantially.
Is Litigation Necessary in Valuation Disputes?
Not every valuation disagreement needs to end with a judge deciding which side is correct.
In mediation, spouses and their attorneys can work toward an agreed valuation, sometimes with the assistance of a jointly retained neutral appraiser or financial professional. The parties may also negotiate how to account for uncertainty or differences in valuation without requiring the court to resolve every underlying disagreement.
Mediation can be useful when both spouses are willing to exchange financial information, consider credible valuation evidence, and negotiate in good faith. However, it is not appropriate for every case. If a spouse disputes the underlying financial information, refuses to provide necessary documentation, or the parties cannot reach a reasonable agreement, litigation may be necessary.
Getting the Valuation Right
A disagreement about property value doesn’t just stop with a disagreement about numbers. Property valuation can affect the overall division of marital assets and, in some cases, other financial issues in the divorce. Therefore, it’s really important to hire an experienced divorce attorney who can advocate for you. Valuation questions can seriously impact the divorce settlement and your financial future after divorce.
Whether the issue is resolved through negotiation, mediation, or litigation, careful attention to the valuation evidence can be critical. A Massachusetts divorce attorney can help determine what assets require professional valuation, challenge questionable valuations, and develop an appropriate strategy for resolving disputed property issues.
If you are facing a Massachusetts divorce and you have questions about property valuation, consulting an experienced family law attorney can help you resolve questions and set in motion any necessary disclosures to resolve the matter.
At Amaral & Associates P.C., we often work with spouses who are dealing with property valuation issues that may head to litigation. Contact Attorney Edward L. Amaral, Jr (617) 539-1010 ext. 111 to discuss your options.
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