Breaking up is hard, but harder still is appropriating the appreciation of the marital estate during the marriage. The most troubling issue with active and passive appreciation in divorce cases is applying a method based on sound theory, good empirical evidence, and a clear common-sense framework. Ashok Abbott demonstrates a methodology and supporting evidence to isolate passive appreciation successfully. By working through a practice-ready example, you’ll be sure to come away with a new appreciation for this complex problem and an elegant solution.

• Understand the importance of appropriation of active and passive appreciation and the factors that drive demand in this area of matrimonial work; 
• The difference between active (spousal effort) and passive (economic environment) components;
  
• Learn the empirical estimation method for identifying significant economic environmental factors and their relative contribution to growth in revenues for selected product categories
  
  • Identify the separate property component of the business value; 
  • Estimate the passive increase in value of this separate property during marriage
    
    • Identify the causal factors impacting the change in value of the separate property during the marriage that are outside the control of the parties;
      
    • Measure the partial and aggregate impact of the identified causal factors, individually and collectively, on the change in value of the separate property during the period of marriage; and
      
    • Identify the proportion of total appreciation attributable to passive factors.
      
• Empirical data and methodology; 
• Illustration:
  
  • Period analyzed (1992 to 2019); and 
  • Industry-analyzed eating places.
    
• Areas for further research.

Participants will be able to:

• Distinguish between marital and separate property in a divorce context; 
• Identify components of active and passive appreciation in a matrimonial litigation setting; 
• Apply empirical analysis to identify the passive appreciation component out of the total appreciation; and
• Present the data and evidence supporting this active/passive analysis in a common sense framework.