Active Appreciation - Divorce Encyclopedia

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Term Definition Active Appreciation - an increase in the value of an asset as a result of its owner’s action, such as refurbishing a property.

Application in Divorce Very often the equity, and watching it appreciate in value over time are all adding to the value of the asset. Those who believe..."I owned it before we got married, so it should be all mine" are almost always in for a big surprise.

Appreciation, active or passive, of marital property is jointly shared. Appreciation of separate property, such as gifts and inheritances, can be more problematic.

In dual-classification, equitable distribution jurisdictions, active appreciation that results from marital efforts is marital property; party who contends that the property is separate.

In find 1) that the separate property appreciated during the marriage; 2) that the parties made marital contributions that caused the appreciation; 3) that there is relationship between the contributions and at least some of the appreciation.

Moreover, the concept of active appreciation of separate property can even extend to the productive efforts of second-tier managers of a separate property business.

See Separate Property.