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In a Georgia divorce, what happens if an asset increases in value?

This question, of what happens in a Georgia divorce, if an asset increases in value since the parties’ marriage will often leave room for legal argument, but in general if an asset increases in value simply because of market forces (e.g. stock you owned prior to marriage and did nothing with, simply appreciates) that appreciation will all be “non-marital” and not subject to equitable distribution to your husband or wife.

However, if any of the increase in value of an asset since the date of your marriage in a Georgia divorce occurred “as a direct result of the labor and investments of the parties during the marriage” then the appreciation in value will be “marital” property and subject to equitable division.

In Georgia divorce, this is often seen in family businesses. This is because the family business will often be the source of employment for a spouse, and if the value of that business increases because the husband or wife worked in the business, that will often be found to be “as a direct result of the labor and investments of the parties during the marriage” and therefore be found to be marital property, subject to equitable division to your husband or wife.

One of the more challenging cases Shaw Law LLC handled involved just this issue in Gwinnett County. Our client (the wife) inherited a business 25 years ago. Her husband worked as the president of this business for 25 years. He demanded 50% of the appreciated value of the business over that period of time, claiming it was “marital” property (which it was under the law).

In the end we retained a fabulous financial expert, who framed the increase in value of the business as adjusted for inflation, thus diminishing the value of this marital asset; and we looked into a detailed manner into the conduct of the husband while running the business as president. Turns out there were many witnesses, with relevant information, that presented a compelling case that the business increased in value despite (not because), of the husband’s management of the business.

The effort paid off in a very large way, as the Gwinnett County trial court saw things our way. This is an example, of one way to address this issue, but each case will differ.

Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.

Scott Shaw is founder and principle of Shaw Law Firm LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.