Hi, I’m Chris Walton, author of this guide and CEO of Eton Venture Services.
I’ve spent much of my career working as a corporate transactional lawyer at Gunderson Dettmer, becoming an expert in tax law & venture financing. Since starting Eton, I’ve completed thousands of business valuations for companies of all sizes.
Read my full bio here.
Amidst the emotional turmoil of divorce is the very practical and methodical division of assets. You are, after all, not only dissolving an emotional bond but a legal one, too.
The Rembrandt on the wall, the family home, and even your business are all fair game.
To keep this division of assets actually fair, courts and lawyers will recommend divorce valuation—a process where all marital assets are valued and divided equitably, if not equally.
We understand the weight of this moment in your life and are here to guide you with clarity and compassion through the process of valuing your shared assets.
Key takeaways:
Before we dive in, it’s important to understand the key terms used in divorce valuations.
Here’s a breakdown of some you’ll come across:
In a divorce, property is divided into two types: marital and separate.
Marital property is everything you and your spouse own together. Think of the house you bought after getting married or the car you share.
Understanding what counts as marital assets in divorce is the first step in knowing what will be subject to division.
Separate property is what you owned before the marriage or received as a gift or inheritance just for you. For example, if you inherited a painting from your grandparent, that’s yours alone.
However, some jurisdictions will also divide assets owned before marriage. So it’s best to look at your State’s laws to know exactly what assets are protected in a divorce.
A valuation date is the day chosen to determine the value of marital assets in a divorce. It might be the day you separate, the day you file, or another date the court decides.
Setting this date matters because asset values can change over time, like stock prices rising and falling or real estate values shifting.
For example, if your house was worth $500,000 at separation but $550,000 by the time of trial, the valuation date decides which figure will be used for the divorce property valuation.
An appraisal is a detailed report prepared by an expert on the value of an asset, such as a home, artwork, jewelry, or a business. This report considers factors like condition, location, market trends, and other technical data.
In many cases, courts require a formal divorce appraisal for high-value assets.
Fair market value (FMV), often determined through an appraisal or by comparing recent market sales, is the benchmark most courts apply to establish the value of marital assets in a divorce.
FMV is defined as the price a willing buyer would pay a willing seller, with both having reasonable knowledge of the asset and neither under pressure to act. This definition is widely applied by the IRS, professional appraisers, and courts, though it is sometimes misinterpreted.
For example, under FMV, if you’re valuing a six-year-old dining room table that originally cost $8,000, its current value would be based on what it could realistically sell for today.
On a local listing, it might only bring in $1,000 or less due to wear and tear, pets, or general depreciation. That means the fair market value of the table included in the marital estate is its resale value — around $1,000 — not the original purchase price.
Equitable distribution and community property are two systems states use to handle asset distribution in divorce.
Equitable distribution means assets are divided fairly, but not always equally. Factors like income, length of marriage, and future needs can influence who gets what.
New York and Florida are examples of equitable distribution states.
Community property states split marital assets 50/50, assuming everything acquired during the marriage is owned equally by both spouses.
As of 2024, there are nine community property states:
Some states in this list may apply equitable distribution principles under certain circumstances.
All the other states not included in this list typically follow the equitable distribution method. But some states, like Alaska, South Dakota, and Tennessee, allow married couples to opt into community property rules.
Now that we’ve covered the basics, let’s go into how asset divisions and valuations work in practice.
That which has been one must now become two. Two lives, two sets of assets.
You can’t cut a house, business, or other piece of property in half. So fairness when dividing assets in divorce, requires asset valuation.
Valuation during divorce is about fairness, legality, and preparing for the future.
You can’t go off of what you feel something is worth. Especially, when you and your soon-to-be former spouse disagree about what the value of different assets are.
That’s why there are third-party valuators available. They apply specific methodologies across different asset types to reach an accurate divorce asset valuation.
No. There are instances where couples can agree to asset division without the need for valuation.
However, where there are disagreements or complexities, the court may order formal divorce appraisal from a third-party.
Divorce valuations can be influenced by a range of factors, each contributing to the overall assessment of assets and determining how they are divided.
Here are some key factors that play a crucial role:
Because so many moving parts are involved in a divorce valuation, it’s important to work with an expert to ensure they’re handled with precision.
At Eton, we’ve completed more than 10,000 valuations and know how to account for these details in a way courts and attorneys can rely on.
The process of property valuation for divorce settlement ensures both spouses walk away with a fair share of the marital estate. The common standard is to find the fair market value of assets, rather than the highest price you can squeeze out of them.
Here are seven steps to guide you through asset valuation in a divorce:
Start by listing every asset, then categorize them. You also need to determine which assets are considered marital property and which are considered separate property.
As mentioned earlier, marital property generally includes assets acquired during the marriage, while separate property includes assets owned before marriage or received as a gift or inheritance. Some inherited assets in divorce will be divided but the exact rules vary by state, so it’s important to review your state’s laws on how assets in divorce are classified.
Here are some common categories in an asset list for divorce:
A clear list of all assets in these categories is the foundation for an accurate divorce asset valuation.
Collect all relevant documents for each asset category, such as titles, purchase receipts, and recent statements, to support valuations.
The value of assets like stocks and bonds can fluctuate over time, so it’s important to determine a specific date for valuation.
This could be the date of separation, the date of filing for divorce, or another date mandated by the court or agreed upon by both parties.
Some state courts dictate when this valuation must be, such as the trial date, while others leave it for the divorcing couple and their lawyers to decide.
Ask your lawyer what the requirements are in your state.
For high-value or complex assets like real estate, businesses, or valuable personal property, a professional divorce appraisal may be necessary. A qualified appraiser like Eton will provide the most accurate and current value of these assets.
Below we’ve outlined the process for appraising common high-value assets, including:
This process is also the standard approach for how to determine house value in divorce, since the marital home is often the couple’s largest shared real estate asset.
Related Read: Business Valuation: 9 Valuation Methods, Formula & How-To Guide
You or your spouse may own complex business interests or assets, such as cryptocurrency, a carried interest in a venture fund, or a private equity fund.
In this case, the situation gets a little more complex. We recommend working with a reliable complex securities valuation company who can make this easier for you.
For instance, at Eton, the valuation process is really simple and fast:
We also offer ongoing audit support if needed. Reach out to us for more information.
Retirement assets in a divorce may include 401(k)s, IRAs, or defined-benefit pensions. Valuing these assets can be complex, especially when determining which portion is marital property.
We recommend working with a financial expert or actuary to calculate the present value of these accounts or to understand the implications of dividing them.
Just as assets are divided, so too are debts and liabilities. Identify all marital debt, including mortgages, loans, credit card debts, and any other liabilities.
This will help in understanding the net value of the marital estate.
With a clear understanding of the value of all marital assets and liabilities, negotiations can begin regarding the division of these assets.
This can be done through direct negotiation, mediation, or, if necessary, litigation.
The goal is to reach an agreement that is fair and equitable to both parties, taking into consideration the laws and guidelines of your jurisdiction.
Throughout this process, it may be beneficial to work with a team of professionals, including a divorce attorney, financial planner, accountant, and valuator to ensure that all assets are properly identified, valued, and divided.
Each divorce case is unique, and the laws governing the division of assets vary by jurisdiction, so professional guidance is essential.
Overwhelmed by the number of assets and different valuation processes involved in your divorce? Want to make sure everything is divided fairly and documented properly?
At Eton, you’ll work with a team trained at Stanford Law and the Big 4, with experience delivering over 10,000 valuations. We bring the same rigor as the largest firms, without the long timelines or high costs.
Whether you need a business, real estate, or complex financial asset valued, we provide clear, defensible reports you can rely on throughout the divorce process.
Review our divorce valuation services and reach out to see how we can support you.
In many cases, yes. Premarital assets are things you owned before you got married, or assets you received later as a gift or inheritance. These are usually treated as separate property, which means they aren’t included when dividing assets in a divorce.
But protection isn’t automatic. If premarital assets get mixed with marital property, for example, if you put premarital money into a joint bank account or have used it to pay off the family home, they may lose their separate status.
Increases in value during the marriage can also be considered part of the marital estate.
The clearest way to keep premarital assets protected is with a legal agreement:
Both spell out what will stay separate if you divorce. Without one, courts rely on state laws to decide what assets are protected and what counts as marital assets in divorce.
If you’re concerned about how to protect assets in a divorce, it’s wise to seek legal guidance early.
Businesses are often one of the most complex parts of a divorce. The first step is determining the company’s fair market value, usually with the help of a professional business appraiser who applies methods like the income, asset, or market approach.
Once the business is valued, courts decide how to divide that value. In many cases, one spouse keeps the business, and the other receives a larger share of other marital assets (like retirement accounts, real estate, or cash) to balance things out.
If both spouses are actively involved in the company, negotiations may involve buyouts paid over time, selling the business and splitting the proceeds, or in rare cases, agreeing to continue co-ownership.
Trust assets are generally not considered marital property because they’re owned by the trust, not the spouse directly. For example, if your parents set up a trust for you, it usually stays outside the divorce.
But if marital money was added to the trust, or if distributions were regularly used to support the marriage (like paying bills or buying a home), a court may decide part of its value should be divided. Judges review the trust’s terms, funding, and use to make this determination
Dissipation happens when one spouse wastes or hides marital money for their own benefit, especially while the marriage is breaking down. Examples include gambling away savings, buying expensive gifts for someone else, or secretly moving funds.
If the court finds dissipation, it can “add back” the wasted money when dividing assets. In practice, that means the spouse who wasted the funds may get a smaller share of what remains, so the other spouse isn’t unfairly penalized.
However, timing matters. Courts usually look for dissipation that happens after the relationship has started to fall apart. If the spending was part of the couple’s normal pattern during the marriage, it’s less likely to be considered dissipation.
Overseas or international assets in divorce are still part of the marital estate if they were acquired during the marriage or with marital funds. That means they’re subject to division just like domestic assets.
The challenge is practical: valuing foreign property can be complicated by exchange rates, while dividing it is made harder by local property laws and enforcement across borders.
For example, if you or your spouse own real estate abroad, the court may order an appraisal but then balance its value by awarding more U.S.-based assets to the other spouse instead of trying to force a transfer overseas.
Because international assets add extra layers of complexity, it’s important to work with valuation experts and lawyers to make sure they’re handled properly.
Full disclosure of international assets is always required, since hiding assets in divorce, whether at home or overseas, can lead to legal consequences and an unfair settlement.
Schedule a free consultation meeting to discuss your valuation needs.
Chris Walton, JD, is President and CEO and co-founded Eton Venture Services in 2010 to provide mission-critical valuations to private companies. He leads a team that collaborates closely with each client’s leadership, board of directors, internal / external counsel, and independent auditors to develop detailed financial models and create accurate, audit-ready valuations.
