When couples divorce in Pennsylvania, many often underestimate the complexity of their marital estate. As an equitable distribution state, Pennsylvania courts generally divide property based on what is fair, and it is not always an even split.
While some assets are easy to price, there are three types that almost always need a formal assessment. Having an accurate valuation of your wealth is key to reaching an equitable outcome during divorce proceedings.
1. Family businesses or professional practices
Whether it is a family-run landscaping company or a private medical clinic, valuing a business is more than what shows up in a bank statement. A forensic accountant or business appraiser will also consider goodwill, which reflects the company’s reputation and ability to earn money in the future.
In Pennsylvania divorces, it is important to separate enterprise goodwill from personal goodwill because it can change the business value. Enterprise goodwill belongs to the business and is usually treated as marital property. Personal goodwill relates to one person’s skills or reputation and may not be part of the marital estate.
2. Real estate beyond the primary residence
A standard appraisal may be enough for a family home. But investment properties, commercial buildings and vacation homes often need a more thorough review. Professionals should also look at rental income, tax effects and market changes. If you owned a property before getting married, you may also need an expert to calculate how much it increased in value during the marriage, since that increase is often divided.
3. Pensions and defined benefit plans
Unlike a 401(k), which shows a clear cash balance, a pension represents a promise of future income. This means you cannot easily determine its value by just looking at an account statement. An actuary must calculate its present value by factoring in life expectancy, retirement age and interest rates to provide a more accurate picture of what the pension is worth now.
Protecting your financial future
When ending your marriage, an inaccurate valuation of your assets can lead to an unfair settlement. A lawyer can help coordinate with professionals to correctly value your marital estate and ensure that property is divided as fairly as possible.
