What if Non-Marital Property Rose in Value During the Marriage?

By Jones & Associates Law P.C.

Property division is a frequent topic for disagreement in a Pennsylvania divorce. Many might perceive that to be related to a marital home, bank accounts, stocks or items of sentimental value. Those are undoubtedly included. However, other issues can arise that increase the difficulty of coming to a resolution that both spouses can accept. This is especially true for people who have property of higher value that both stake a claim to. One common problem is if non-marital property rose in value after the couple was married. Understanding how this can be addressed during the divorce is essential to reach a fair result.

Measuring Changes in Value

If, for example, one party owned a business prior to the marriage and that business experienced a significant increase in value during the marriage, it was initially a non-marital property but its greater value could be subject to property division in the divorce. If the property was acquired before the marriage or was garnered in exchange for property that was acquired before the marriage, it is non-marital property. It is also non-marital property if it was acquired as an inheritance or in exchange for that type of property.

When measuring its value increase, it will start from the date of the marriage or whenever the property was acquired. It will continue until the time the couple separated or when the hearing for equitable distribution will be held. This will be determined by when increase will be the least. Non-marital property reducing in value will result in an offsetting against increases in non-marital property value. An example might be if there was a business that rose in value and a collectible automobile collection that decreased in value, there would likely be an offset. If the non-marital property of one person decreased and the other person had non-marital property that decreased, there will not be an offset.

Complicated Disputes

Pennsylvania uses equitable distribution when it decides how property will be divided in a divorce. This means that it wants to achieve fairness. That does not always mean equal. In cases where the non-marital property grew in value and it was partially due to some level of contribution by the non-owning spouse, then it could be shared in some way when the divorce case is decided upon. Knowing how these somewhat complex circumstances are addressed is important from both perspectives. To be fully protected and have a fair accounting, it is useful to have professional assistance.