Any failure to provide documentation may result in the division of the asset in the divorce. The increase in the value of the asset attributable to the improvement is likely to be considered marital. Active Appreciation . Passive appreciation occurs when an asset increases in value without any action by the parties. For example, if the value of real estate increases without the parties improving the property, it is considered passive.
Active appreciation is a marital asset.
Active appreciation occurs when the value of an asset increases because of an act by the either of the parties during the marriage. Capital improvements to real estate during a marriage may create a marital interest since a capital improvement is likely to add to the property s value. For example, if one spouse owned a vehicle before marriage and that vehicle is later traded in for a new vehicle during the marriage, that party may be able to trace a non-marital interest in the new vehicle. Tracing is really the process of establishing a sufficient paper trail to claim a non-marital interest in a subsequently purchased asset. One potential exception is an appellate court case from the early 1980's which dealt with non-marital interests in real estate.