In North Carolina, the court ordered or agreed-upon division of assets and debts that occurs when spouses separate is called equitable distribution. For purposes of equitable distribution, the parties’ marital assets and debts are valued as of the date of separation. The value of property is determined based upon the fair market value.
Fair market value is considered an estimate of the amount in which a willing buyer would pay, and a willing seller would sell, if neither were under any duress to buy or sell the item. Fair market value is not replacement value, retail value, sentimental value, or trade-in value.
When valuing real estate for purposes of equitable distribution, unless the parties agree on a value, it is usually necessary to engage the services of a real estate appraiser who can perform an appraisal to determine the fair market value. Fair market value of financial accounts, such as bank accounts, investment accounts, and credit card accounts, can usually be determined by using the account statement that covers the date of separation. Business interests may need to be valued by a certified business evaluator. Fair market value of vehicles may be determined by using NADA or Kelly Blue Book references.
For most personal property, such as furniture, furnishings, electronics, and sporting goods, the fair market value is simply the amount the item would sell for on the open market with consideration being given to the age and condition of the item. Parties sometimes use sources such as eBay, Craigslist, or local publications such as Mountain Express or Iwanna to find items that are comparable to the ones they are trying to value in order to determine fair market value in equitable distribution matters. Unique items such as antiques, jewelry, coin collections, and art collections may be more difficult to value and may require the services of a personal property appraiser.
This article is for information purposes only and is not to be considered or substituted as legal advice. The information in this article is based on North Carolina state laws in effect at the time of posting.