Valuing Marital Property – Fair Market vs Intrinsic Value

Valuing Marital Property – Fair Market vs Intrinsic ValueValuing Marital Property – Fair Market vs Intrinsic Value

Before a court can officially act on the division of marital property in any divorce case, a value must be placed on all spouses’ assets and liabilities. Having a value placed on property – even if it has been deemed one spouse’s separate property – allows the court to look at the whole picture. Remember that the court’s goal is not to split property 50-50 between spouses, but to be fair and just in its division of property.

This article outlines the two measurements courts use to properly place a value on assets and liabilities: Fair Market Value and Intrinsic Value.

Fair Market Value

Fair Market Value is the price the property will bring when it is offered for sale by one who desires but does not need to sale, and is bought by one who desires but does not need to buy. Fair Market Value applies to all forms of real property (residential, commercial, and unimproved, as well as mineral interests). Some property such as cash and bank accounts are easy to put a value on because of their face value. Other forms take a little more work to calculate. This can involve using state-certified and licensed real-estate appraisers to find comparable sales. A value that is appropriately supported, financially feasible and results in highest value is used.

Intrinsic Value

In the event a piece of property has no fair market value, such as household goods, clothes and other personal property, the court can use intrinsic value. This is the actual monetary value a property’s use to the owner has, excluding any sentimental considerations. Because intrinsic value is a matter of personal opinion, it is not as susceptible to measurement as Fair Market Value. When forced to rely on intrinsic value, the court can look into the original purchase price, replacement cost, uses, condition, and any other facts that might shed light on valuation.

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