Georgia law provides for equitable division of marital property in a divorce case. The purpose behind the doctrine of equitable division of marital property is to assure that property accumulated during the marriage be fairly distributed between the parties.
Property acquired as a direct result of the labor and investments of the parties during the marriage is subject to equitable division. Each party is entitled to an equitable, but not necessarily equal share of the property.
How is it done? Georgia jury instructions tell how the court or jury can approach dividing property. There are a number of ways property can be divided. The jury is instructed as follows: “If you decide to make an equitable division of property in this case, you should bear in mind that the law permits an equitable division of property in sever-al different ways:
1) You may make an equitable division of specific personal property or real property. That is, you may designate the specific property (such as so many shares of stock in a named company or a certain house or tract of land) to be awarded as equitable division of property.
2) You may make an equitable division of property in cash. That is, you may designate a certain sum of money to be award-ed as equitable division of property, even though that sum of money is not presently in the form of cash.
3) You may make an equitable division of property by awarding specific items of property and also awarding an amount of cash. 4) Furthermore, you have the power to award percentages of property to spouses or to require the parties to sell property in equitably dividing the marital property.”
The judge uses the same rules if the case is tried without a jury.
A pension providing for a lifetime benefit, known is a defined benefit plan, can be divided by having a present value calculation made based on the total amount of contributions in the life expectancy of the beneficiary. This is a simplified description of what an actuary would do to compute the present value.
There are 3 ways pensions can be then divided by the court:
• The immediate offset, or net present value method allows the party owning the pension to keep it, and the other party is given a share of other property or money equal to what an equitable share of the pension value would be.
• The deferred distribution method requires the pension owner to pay a portion of the pension payments to the other party at the time payments of the pension benefits actually start.
• The reserve jurisdiction method allows the court to not make an immediate decision, but wait until the pension starts paying to decide how the pension payments will be divided.
Which method the court or jury may choose depends on the value of the pension, the value of the other marital property of the parties, how long before the pension will start paying, and other equitable factors.
When a party owns an interest in a business that does not have publicly trad-ed stock, the court must make a valuation of the business. There are 3 approaches to valuation of the business:
• The asset or cost approach is based on the book value of the business, which is very generally the value of its assets over liabilities.
• The income or capitalization method involves calculation of what value it would take at a given interest rate to earn the income that the business actually generates.
• The market approach involves researching comparable companies that have been recently sold in comparing the sales price of such businesses to the business in question to get a comparable price or value.
Both pension valuation and business valuation generally involve the assistance of an actuary or business valuation expert who can make the necessary calculations to come up with these values. Attorneys usually work closely with these experts to provide the needed information to the expert and to develop their testimony in order to give the court or jury a clear idea of what the value is and how it was calculated.