Proper valuations are essential to dividing property and calculating equalization payments in Ontario. Mistakes that result in undervaluing or overvaluing property can create significant financial and legal headaches. As such, it is crucial to avoid them, including the more common ones we discuss below.
Oversimplifying the process
Too often, the mistakes people make when valuing property involve using shortcuts to try and oversimplify the process. They might:
- Assign the same value to similar properties without accounting for taxes and disposition costs
- Fail to rely on professionals for a unique property valuation
- Lump property together
- Guess at the value based on purchase price or internet searches
These efforts might make it seem like you are moving the process along faster or making things easier, but ultimately, they could cause more problems than they solve.
Giving false information
Lying in legal documents is a crime. Unfortunately, some people feel so desperate or angry during their split that they make the mistake of doing this. One man reportedly altered emails from appraisers to lower the valuations of his matrimonial home so that he could afford to buy out his wife.
Although this happened in another country, these actions are just as problematic and unlawful here in Ontario.
When you submit financial information for purposes related to your divorce, it is essential that you are honest and forthcoming. Failure to do so could have legal and financial consequences for you.
Failing to treat specialized assets accordingly
As we discuss on our asset valuations page, specialized assets like pensions, stock portfolios and certain businesses are different from other assets. Because of this, they generally require more technical treatment than traditional assets like vehicles and bank accounts.
Typically, these properties demand the services of specialized experts to value them accurately. If you try to calculate them yourself, you could create issues that jeopardize your settlement.
Managing your money, property and liabilities in a divorce can be overwhelming, regardless of how sizable your estate may or may not be. However, avoiding these mistakes can make it easier to resolve financial matters fairly and move forward. A consultation just might be a good start.