It is important for those who are going through a divorce or legal separation, or even some sort of non-marital breakup, to be aware of the difference between market value and sentimental value.
The reason is that knowing the difference, and knowing how to recognize each, can be key to getting a fair property division that, at the end of the day, will meet a Peoria resident's long-term goals.
Fair market value is what a court will look at, at least in theory, when determining how much a couple's marital estate is worth and, by extension, what an equitable division of that estate will look like. It is based on what price a hypothetical reasonable seller would accept from a reasonable buyer when neither party has any special circumstances or is under any financial pressure to act. In short, a property's fair market value is determined by at least two people interested, but not too interested, in doing business with each other.
Sentimental value, on the other hand, is what one person, usually the one who owns or who is most associated with a piece of property, thinks the property is worth. Even for a fair-minded person, sentimental value is often much higher than a piece of property's fair market value, as the person may naturally confuse her own emotions about an asset with what the property is actually worth on the open market.
The reason sentimental value is potentially dangerous in a family law context is that it can mean a person makes the mistake of trading too much for a piece of property that he thinks is worth a lot more than it actually is, only to find himself in a compromised financial position down the road.
While not bad per se, sentimental value can also make it harder for a couple to reach an agreement about property in the first place. Illinois residents need to be aware of the risks and could speak about the matter further with their family law attorneys.