Georgia law recognizes that a spouses non-economic contribution to a marriage might be reflected in an equitable division of property, regardless of the actual legal ownership. In particular, separate property may be deemed (in whole or in part) marital property by the court upon divorce if the value of the property appreciated during the marriage and that appreciation was caused by the efforts of the other spouse.
The key test seems to be one of active v passive appreciation. If the value of certain assets has appreciated, at least in part, by the contributions of either spouse there may be a claim of active appreciation. One of the biggest questions in this regard is in regards to the active appreciation for a business owner. If that company grows and succeeds because of the ideas, leadership and business acumen of the owner, that increase in value is due to active appreciation.
Passive appreciation, on the other hand, is the increase in the value of certain assets due to outside market forces such as supply and demand and inflation. For example, let’s say Person A bought a home 20 years ago. Upon purchase the house was worth $10,000. Over the last 20 years, Person A made no improvements to the home, but the area around that house was successfully developed over the past 20 years. Today, due to no efforts on the part of Person A, the parcel is now worth $100,000. This is passive appreciation.
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