In plenty of family law cases, spouses are actually able to agree on what the percentage division should be, for example, 50/50, 60/40 etc, but then find themselves locked into serious conflict over how that percentage division should actually be achieved. In these conflicts, the point of argument is almost always turns on the question of the value or price at which the asset is to be retained by one spouse or the other.
To assist in the resolution of these types of disputes, the following is a suggested “decision tree” which might be followed:
- At the risk of stating the obvious, the items should be valued and then a comparison made between the value asserted by the Husband and the value asserted by the Wife.
- Are the competing valuations from each side truly objective, or has one side simply plucked a (ambit/subjective) figure basically out of the air. By objective, we mean that reference has been made to independent evidence of values such as Red Book websites for motor vehicles, Gumtree, eBay or other online/public domain marketing avenues. If one spouse is working off a pure subjective guess then to the extent possible, they should be encouraged to redo the exercise by reference to independent evidence.
- If the competing opinions on values are each objective per item 2, then consideration should be made towards jointly engaging an independent valuer. A “joint” valuation is usually not absolutely binding on the parties but it would be hard to argue against it. If a joint engagement of an independent valuer is not possible, then each spouse might consider engaging their own independent valuer with those valuations to then be exchanged and the spouses to thereafter consider “splitting the difference” between the two independent valuers.
- Is pulling a “switch a roo” an option? that is simply saying to the other spouse “OK if I say the item I want to keep is worth $5,000.00 and you think it is worth $10,000.00 then you can take the item at $10,000.00 and I will just go an buy myself a replacement item with the cash payout you are paying me for my share of the original item”. When presented with this ultimatum, the spouse pressing the higher value for the item will often say “I don’t want it” and therefore be forced to either drop their assertion as to the value of the item or agree to go to a joint valuation arrangement. This strategy can also be used in the inverse situation however in that case, the spouse seeking to retain the asset would usually be expected to put up much more of a fight.
- Is the replacement cost of the item greater than any “over the money” valuation the spouse seeking to retain the item is being asked to accept. If the replacement cost of the item is significantly greater than any “over the money” valuation then the spouse seeking to retain the item could well still be better off financially by accepting the over money payment but this will always be a question of fact and degree.
- Can the “over the money” value be traded against any other “over the money” value that could be put against assets the other spouse is seeking to retain.
- Under this option, one spouse is asked is to divide all of the relevant assets into two lists which are equal according to value and utility according to that spouse. After that division is done, the other spouse is then bound to choose one of the two lists. By this method, the spouse doing the division will want to be very sure that each list is as balanced and equally valued as possible because they will have no control over which is list is chosen by the other spouse and of course the other spouse then has not option to trade items. The process is quite brutal but in appropriate cases can nonetheless be an effective resolution tool.
Michael Zande is a Queensland Law Society accredited family law specialist with over 25 years experience in the field. He is the principal at Zande Law Solicitors, Suite 7, Norwinn Centre, 15 Discovery Drive, North Lakes. To contact Michael for advice phone 3385 0999.
The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.