How Much Have Your Assets Appreciated During Your Marriage?
When spouses enter a marriage with separate property—such as real estate, investment accounts, businesses, or other valuable assets—those items may remain classified as separate property in the event of divorce. However, even if the original asset is protected, any increase in value during the marriage may be subject to equitable distribution, depending on the circumstances.
This is because asset appreciation can occur for multiple reasons. Some appreciation is purely passive, resulting from market conditions or inflation. Other appreciation is active, meaning it stems from marital contributions—such as financial investment, strategic decisions, business development, or support provided directly or indirectly by the non-owning spouse. Active appreciation is often treated as marital property and may be divided during divorce.
For individuals of high net worth, ensuring that assets are correctly classified as separate or marital property is essential. It is equally important to obtain accurate appraisals so that any increase in value is properly measured. Even when a prenuptial or postnuptial agreement exists, the appreciated value of a separate asset may still be divided if the growth resulted from marital contributions or the asset became commingled.
At Stange Law Firm, PC, we provide knowledgeable and experienced representation for high-net-worth clients seeking fair and accurate distribution of appreciated property. Our firm understands the legal standards governing asset characterization and employs detailed financial analysis to protect your rights.
Equitable Distribution vs. Community Property States
Most states follow the equitable distribution model when dividing marital assets. A smaller number follow the community property model. Understanding the difference is crucial in determining how appreciation will be divided.
Equitable Distribution States
In equitable distribution states, marital property is divided in a way that is fair and reasonable—but not necessarily equal. Courts consider factors such as:
Each spouse’s income and earning capacity
Contributions to the marriage (financial and non-financial)
Length of the marriage
Future financial needs
Direct or indirect efforts that increased the asset’s value
Appreciation of separate property may be divided if the court determines that marital labor or resources contributed to that growth.
Community Property States
In community property jurisdictions, most assets acquired during marriage are considered jointly owned. At divorce, the default rule is a 50/50 split.
While separate property generally remains separate, appreciated value may still be subject to division if:
Marital funds contributed to the increase
The property was converted to community property
The non-owning spouse contributed to the growth of the asset
Both systems aim to achieve fairness but reflect different legal philosophies in how marital contributions are measured.
Dividing Sole Owner Property in Divorce
When only one spouse legally owns an asset—such as a business, professional practice, investment account, or real estate—the question becomes: Should the non-owning spouse receive a share of the appreciated value?
Answering this question requires in-depth investigation and sophisticated financial analysis. Our firm routinely works with:
Independent financial accountants
Business valuation experts
Real estate appraisers
Forensic analysts
These professionals help ensure that all assets are fully understood, accurately valued, and properly classified before any settlement or trial.
Key considerations include:
• Characterization of Property
Is the asset separate property, commingled property, or marital property? Courts analyze the origin of the asset, how it was maintained, and whether marital funds were involved.
• Appreciation of a Business or Professional Practice
If a business increased in value during the marriage, courts examine whether:
The owning spouse’s labor drove the increase
Marital resources supported business growth
The non-owning spouse contributed indirectly through household or childcare responsibilities
Active appreciation is often marital.
• Indirect Contributions of the Non-Owning Spouse
A spouse may be entitled to a share of the appreciation even without direct involvement. Examples include:
Supporting the business owner’s career
Working within the business informally
Managing household duties that allowed the owner to focus on the business
Providing education or training support
• Gaining Access to the Asset
Courts may use a variety of tools such as:
Awarding offsetting assets
Calculating distributive awards
Allocating a percentage of appreciation
The specific remedy depends on the jurisdiction, the nature of the asset, and the evidence presented.
Skilled Representation for Complex Appreciation Cases
Stange Law Firm, PC has deep experience handling high-net-worth divorce matters involving asset appreciation, tracing, valuation, and division. We help clients understand:
How their property will be characterized
Whether appreciation is subject to division
What financial experts may be needed
How to protect separate property
What rights they may have in their spouse’s appreciated assets
Our goal is to provide clear, strategic, and effective representation that protects your financial future.
Contact Our Multi-State Lawyers
For more information about how our lawyers can assist you with separate property in divorce, contact us online or by phone to schedule a confidential consultation at one of our convenient locations.
