What Types of Assets Can Increase in Value During Marriage?

Various types of assets might increase in value during a marriage in North Carolina – and these assets may have a serious effect on a later divorce. These types of assets are generally associated with high-net-worth and high-earning spouses, as they typically invest their money into assets that appreciate in value over time. That being said, even relatively modest families may invest their money into appreciating assets. What are these asset types, and how might they affect a divorce in North Carolina?

Many spouses in North Carolina choose to invest in various forms of securities, including stocks. The S&P 500, which essentially tracks the US economy, has been delivering average double-digit returns for investors each year for decades. If your marriage lasted many years, there’s a good chance your stocks appreciated considerably in value during that time. Many spouses approach their marriage having already acquired considerable portfolios, while others choose to invest together as they experience career success during marriage.

Although many spouses invest in stocks, perhaps the most notable store of value for North Carolina spouses is the family home. Purchasing your own real estate can be an important step for many spouses in North Carolina – and it may also be a valuable investment throughout the years. Real estate provides not only financial security but also a reliable roof over your head. It prevents you from being controlled by landlords, and it allows you to make renovations as you see fit. Real estate doesn’t quite match the stock market in terms of overall performance, but it comes quite close.

Businesses may also increase in value over the course of a marriage. In fact, a family business has the potential to outperform both real estate and stocks in terms of appreciating value – transforming from a simple farm or store to a multi-national corporation. All it takes is one decent idea, and a couple can become wealthy within just a few short years. Many family businesses are structured as corporations and have various shareholders.

One of the most surprising assets that can increase in value during marriage is a collectible. Even a seemingly worthless stamp collection, retro video game cartridge, or trading card can become incredibly valuable within just a few decades. While spouses may not actively “invest” in these collectibles in the same way as stocks or real estate, they nonetheless become valuable additions to the family estate. This is why spouses should be very careful when taking inventory of all household items – especially if you are not sure about their real value.

Finally, many spouses today invest in fine art, which has shown the potential to outperform the stock market in some situations. Assuming spouses have a good eye, a painting can increase in value during the course of a marriage.

Appreciating assets may be especially complicated during the equitable division process in North Carolina. This is because while the underlying asset may not be marital property, any increase in the value of that asset could be divided between spouses.

To understand this concept, it is important to realize that if you owned certain assets prior to marriage, these assets remain separate in the event of a divorce. In other words, you can keep them without dividing them with your spouse.

For example, if you owned a home prior to the marriage and your spouse eventually moved in, this would still be your residence (and yours alone) in the event of a divorce. However, any increase in the value of the property could be considered marital property. Let’s say your home was valued at $50,000 when you were married. After 20 years of marriage, it may be worth $100,000. In this case, your spouse may have a claim to half of the increase in value. In other words, they may be eligible to receive a $25,000 share of the property. The same logic applies to virtually any other appreciating asset – including stocks, fine art, collectibles, and much more.

If you have been searching for a qualified divorce attorney in North Carolina, look no further than Arnold & Smith, PLLC. Over the years, we have helped numerous spouses throughout the Tar Heel State – including high-net-worth individuals who face property division. We know that assets may increase in value considerably during marriages, and we understand that these complex assets may cause all kinds of confusion in the event of a divorce. To pursue financial security and approach property division with a measure of confidence, reach out today and book a consultation.