04 Oct What is an Inventory and Appraisement and Why Should an Inventory and Appraisement be Exchanged?
What is and Inventory and Appraisement?
In a divorce, one of the most basic things that must be accomplished by the parties and the court is divide the property. The court is charged with ensuring that the division of the marital property is accomplished in a “just and right” manner. In order for the court to evaluate how the marital property should be divided, the Court will need to know three things about the property.
First, in order to divide the marital estate, the court needs identify all of the assets and liabilities of the marital estate. The marital estate consists of all the real and personal property owned by the community estate, each spouses’ separate estate, all liabilities and any claim for reimbursement.
Second, in order to divide the marital estate, the court will need to characterize each asset and each liability of the marital estate. In other words, the court will need to determine whether the asset or liability is community property, one spouse’s separate property, or whether the asset or liability is a mixture of community and separate property. Generally, the separate property of a spouse cannot be divided in a divorce. If a spouse is claiming that an asset or a liability is the separate property of one spouse, then he must be prepared to present evidence as to the nature of the asset or liability for purposes of characterization as separate property.
Lastly, in order for the court to divide the marital estate, the court will need to understand the value of each asset. The court will not be able to divide the marital estate unless a value is presented to the court as to the value of each item. There are a number of ways for an individual to identify the value of an item. A spouse should be prepared to present evidence of value to the court by presenting evidence about what a willing buyer would be willing to purchase the item for if the spouse was willing to sell the item. Some items may require expert testimony to provide evidence of the items worth. For example, the value of real property may require an appraisement. For other items, such as personal property, the court may be comfortable in determining value based only on the testimony of one of the owner spouses.
The Inventory and Appraisement is an effective tool for determining the identity, the characterization and the value of the marital estate. The inventory and appraisement is essentially each spouse’s opinion about the identity, character and value of his or her property.
When an inventory and appraisement is filed with the court and properly admitted into evidence, the inventory and appraisement constitutes a judicial admission on behalf of the party filing it. Further when an inventory and appraisement is filed with the court and admitted into evidence, the party filing the inventory and appraisement is barred from offering evidence or testimony to dispute the facts admitted in the inventory and appraisement. Therefore, it is vital that the spouse is confident in the facts asserted in the inventory and appraisement before it is filed and admitted into evidence with the court.
When an inventory and appraisement is filed but not admitted into evidence the inventory and appraisement cannot be considered evidence, however the court can take judicial notice that at one time the person filing the inventory and appraisement held that the facts in the inventory and appraisement were true.
When an inventory is not filed but just exchanged between the parties or their attorneys, the court cannot take judicial notice that the facts in the inventory and appraisement were held to be true by the party creating the inventory and appraisement.
Why should I prepare and Inventory and Appraisement and Why should I force my other spouse to prepare one?
First, if you do not prepare an inventory and appraisement your attorney will be unable to evaluate whether you are being awarded a “just and right” division of the marital estate.
Second, if your attorney does not force your spouse to prepare his or her own inventory and appraisement your attorney will not have an understanding of the other spouse’s opinion regarding the marital estate unless your attorney requests discovery from the other party. Your attorney will not know whether all items have been identified, will not know whether the other spouse is asserting or contesting that property is separate property, and will not know what the other party’s opinion is as to the value of each item; unless discovery is conducted.
Third, exchanging an inventory and appraisement is often much less expensive and time consuming than conducting formal discovery. Your attorney can likely discover all of the same information related to the identification, the characterization, and the value of the assets and liabilities through discovery; however, discovery will raise the cost of completing the divorce and can extend the duration of the case.
Fourth, it helps to ensure that the divorce is final when the court signs the order. If the decree does not award all of the property in the marital estate the court could reopen the case and the division of the marital estate could be relitigated.
Fifth, it protects each spouse from being tricked into agreeing to an order that fails to address all of the property. If the parties exchange an inventory and appraisement and one spouse later discovers that the other spouse is in possession of property that was not disclosed in the inventory and appraisement, then the court may reopen the case to prevent the other spouse from being awarded property that was hidden from the other spouse.