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The Divorce Encyclopedia
Active Asset

Term Definition Active Asset - real or personal property, including tangible and intangible, which changes in fair market value as a result of actions by its owner.
Application in Divorce A professional practice can be an active asset just as a marital home can be. Improvements to the home and growth of the practice make the assets active.

In both of these examples, the actions of the owner influenced the fair market value of the asset to increase. In both of these examples the fair market value most likely would increase, but a decreasing asset may also be considered active.

When dividing an active asset in divorce, it can be very challenging to put a proper value on it on a specific date, especially if a substantial change occurs close to that date.

For example, a husband’s company is valued at $500,000 on 3/20/2006 and on 3/21/2006, just one day later, the company acquires two major clients with each having a two-year contract. In just one day the value of the company nearly doubles. This would be considered a very active asset, which requires much attention in resolving what is fair and equitable in a property distribution for divorce.

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