While extremely high-asset divorce cases seem to be on a level of their own, they do offer valuable lessons to anyone considering a divorce, whether they live in New York or elsewhere. A recent divorce making national financial and social media headlines involves the wealthy oilman Harold Hamm. While this divorce case has yet to fully play out in court, two key factors regarding the division of assets are being highlighted.
The Harold and Susan Hamm divorce is taking place in another state that has equitable distribution laws similar to those used in New York divorce cases. Equitable distribution means that any marital property is subject to a fair and equitable division as determined by the court, unless otherwise agreed upon. What this doesn’t take into account is the active and passive appreciation of property value. Active appreciation deals with property values that increase based on the efforts of a spouse, such as the business growth seen under Harold Hamm’s leadership; where passive appreciation occurs with no effort, such as land value. Documentation is key in proving how and why the value of property changed during the course of a marriage, which will in turn affect the amount each spouse is entitled to receive in divorce.
Along with keeping track of active and passive property values, establishing a formal date of separation is also important. This date is significant as property value increases that occur after separation are not necessarily subject to distribution laws. Unfortunately, in some cases the date of separation can be difficult to determine.
While not all divorce cases deal with assets like those in the Hamm versus Hamm divorce, the lessons taught about the importance of property values and the date of separation can be applicable to all. Couples in New York who are considering divorce may benefit from considering how these two things will affect their final settlement. Regardless of financial circumstances at the time of divorce, achieving a fair and equitable division of assets is possible.
Source: Forbes, “A Multi-Billion Dollar Divorce: What All Divorcing Women Can Learn From Sue Ann Hamm”, Jeff Landers, Sept. 22, 2014