Top Ten Ways to Value Assets and Determine Debt
Here are some ways of determining accurate values for your assets and debts on the date of marriage and date of separation as part of the equalization process. If you are not sure what I mean by “equalization process”, start by reading the article describing that process and then come back to this one.
Two important things to remember is to ensure you have the correct date for your documentation (date of separation and date of marriage) and ensure you use the fair market value (not the retail price or replacement cost).
1. Bank balances, RRSP’s, amounts owed on a loans (lines of credit, car loans, mortgages) and credit card balances are easy: get a copy of the bank statement, RRSP statement, loan statement or credit card statement that contains data for the date of separation and for the date of marriage.
2. For the value of an automobile, you can get an appraisal done of it at a dealership or go to the library and look up the “black book value” of the car. Make sure you know the year, make, model and mileage when you look it up.
3. To determine the value of household contents, it is the fair market value of each item. This is the value if you purchased the item at a garage sale. So it is a fraction of the retail value.
4. A home appraisal will determine the fair market value of the home. An appraisal can be done by a real estate agent or by a certified appraiser. The agent will be less expensive than the certified appraiser but will be less persuasive.
5. The value of a privately owned business is more tricky. Often privately owned businesses are valued by certified business appraisers. The cost of such appraisals can range from $7,000 to $12,000 or more depending on the complexity of the business.
6. The value of publicly traded stocks and bonds can be determined from the value of the stock at the close of the day on the relevant dates.
7. Pensions are appraised by pension valuators. We use two companies both of whom have excellent websites which explain their role. www.pension.ca and www.pensionappraisals.com.
8. Stock options are very complex to appraise but we have connections with appraisers in Toronto who can do it for us.
9. Cash surrender value is the value of your whole life insurance policy. Just ask your insurance agent for a letter stating the cash surrender value.
10. Getting your divorce finalized? Priceless.
Our law clerks can help you gather the documentation you need. Our lawyers have contacts with well-regarded appraisers and other experts who can help us if necessary. You can keep your legal costs to a minimum by doing a lot of the legwork such as gathering the proper documentation and we can help with the rest. We do our best to minimize your costs while ensuring your obligation to provide full disclosure is met.
