Inventory And Appraisement
Parties to a divorce are generally required to file a sworn statement with the court listing and valuing their assets. The statement is called an "inventory and appraisement" or "financial statement." The temporary orders issued by a court when a divorce petition is filed typically require the spouses to produce the inventory by a certain date and sets out the form of the inventory.
Each spouse files his or her own inventory with the court, which is signed under oath. The value a spouse places on the property may be based on opinion or fair market value, if known. The spouse's inventory also includes a list of any debts owed. It is not necessary that an independent appraiser be hired to value the property.
TIP: If there is a dispute in the inventories as to the value of a piece of property, hire an appraiser to settle the dispute.
The inventory is not binding on the court. In fact, the court is required to hear evidence that the property listed is valued correctly. Evidence of property value can be in the form of testimony, receipts, deeds, notes, tax appraisals and other documents.
Marital Property
In the inventory, the spouse must identify "marital property" (or "community property" in community property states), owned jointly by the couple. Marital property consists of both real estate and personal items, and generally includes:
- the family home;
- real estate purchased during the marriage;
- vehicles;
- tools and equipment; and
- bank accounts, certificates of deposits, stocks, bonds and IRAs.
TIP: If any of the property is mortgaged, the amount of the mortgage must be included along with the value of the property.
SIDEBAR: Benefits should be listed as marital property. A value must be placed on the benefit. Typical benefits include employment benefits (profit-sharing plans, retirement plans, pension plans) and union membership benefits (insurance, pensions, retirement benefits)
Separate Property
Not all property is necessarily marital or community property and spouses should include any and all property that they believe is separately owned.
In a community property state, a spouse's separate property is typically limited to:
- property received through gift or inheritance;
- property owned before the marriage (which was not commingled);
- property that is partitioned by written agreement; and
- bank accounts, certificates of deposits, stocks, bonds and IRAs owned before marriage and kept separate.
In non-community property states, separate property may also include items the spouse purchased with their own income.
TIP: Separate property includes any claims for reimbursement one spouse has against the other. For instance, if the couple's joint income was used to pay off the husband's car loan (purchased before marriage), the wife should list a claim of reimbursement for a portion of the payments.
Debts
Spouses are required to list their debts in the inventory. Both the husband and wife, or only one of the spouses, can owe the debt. The debt is listed as either a marital debt or as a separate debt. In community property states, both spouses are liable for all debts incurred during marriage.
The debt must be identified by setting out:
- a description of the property;
- the date the debt was created;
- the amount of the debt;
- the name of the person or company that is owed the debt;
- the date the debt is due; and
- the amount of monthly payments required, if any.
TIP: Credit cards must be listed as well. The person or persons on the account must be identified, along with the total amount owed. It is also wise to include the amount of monthly payments and interest rate.
TIP: Attorney's fees owed or that will be owed as a result of the divorce litigation must be listed.
Can I change the inventory once it is filed?
Yes. In fact, you must correct the inventory if you have made a mistake or error.
What happens if I forget to list a piece of property?
You can file a new inventory with the court listing the property you forgot. The inventory is called the "Amended" or "Corrected Inventory and Appraisement."
TIP: Property that has been lost or destroyed should be included on the inventory. For instance, a valuable painting that was purchased by the husband and wife during the marriage but which was destroyed in a fire since the separation must be listed, along with a statement explaining its loss or destruction.
My spouse did not list one of his stock portfolios on purpose. What do I do?
Notify your attorney or the court. If your spouse is fraudulently concealing property, he is in contempt of the court's temporary orders and could be jailed or fined.
SIDEBAR: The inventory and appraisement is a type of discovery (a document that must be furnished in litigation), and failing to provide discovery can result in a monetary fine.