When a party is contemplating divorce it is important to conduct a thorough inventory of your financials including stock accounts, retirement accounts, real estate assets, business interests and anything of value that is in your portfolio, such as jewelry, cars, and other high value assets. Next, assets need to be divided into ‘premarital’ and ‘marital’. Premarital (or ‘non-marital’) assets are those assets that were owned by one of the spouses prior to the date of the marriage. Marital assets are those assets acquired during the marriage. After all the assets are listed and are categorized as marital or non-marital, a valuation should be determined for each of the assets that are not readily determinable, i.e., a current appraisal for real estate or assets whose value may have changed since the marriage.
If any of the assets were premarital, then an evaluation needs to be conducted on whether there has been any increase in their value during the marriage since the date of the marriage. If the increase in value is “passive” – as a result of the market without any active participation on the part of the spouse, then this increase should not be included in the marital share; i.e., the other spouse is not entitled to share in this increase. If, on the other hand, the increase in value is as a result of “active” appreciation – the efforts of one or both of the spouses; i.e. spending marital funds to improve real estate or actively trading stocks, then the increase in value is considered marital and will be awarded as part of the marital share.