Using an appraiser in a high asset California divorce

When a California couple decides to end their marriage, one of their most immediate concerns is division of the marital estate. Most Californians realize that they live in a community property state, but very few understand how that law works.

Basically, the community property statute commands that all property acquired by the couple during the marriage must be divided equally. This does not mean that all property must be sold and the net proceeds distributed equally between the spouses. Many high asset couples negotiate an allocation of assets that, in the end, results in each spouse receiving 50% of the net estate.

In order to reach the required 50/50 division, couples are often required to retain real property appraisers to determine the value of their assets. Certain assets, such as stocks and bonds listed on a public exchange, to not require an appraiser; the exchange sets the value. Other assets, like real property or stock in a family owned business almost always require an appraiser to determine value. Without an appraiser to determine value, the couple will be merely guessing at the value of their largest asset. Appraisers can take the guessing out of this process.

A real estate appraiser who is hired to value the family home must make several different estimates of value. The appraiser will first determine the fair market value of the home. In making this determination, the appraiser will compare the house to other houses that have recently been sold. This approach is called the comparative sale approach to value. An appraiser may also estimate the cost in labor and materials to build the house from scratch. This is known as the replacement cost approach to value. Because most houses in the Bay Area appreciate in value, especially if the couple has been marred for more than 10 years, the replacement cost approach is rarely used to determine final market value.

In high asset divorces, both parties usually hire their own attorneys. Each attorney most likely has a stable of appraisers that are competent and trustworthy. A competent divorce attorney can usually find an appraiser who will render a fair opinion on the value of the home.