There are many difficult aspects of the property division process, but human psychology may be one of the biggest obstacles to resolving asset disputes. New research from the University of Nebraska-Lincoln examines the role psychology often plays in property division.
One example is the “endowment effect,” which describes how a person tends to value objects more when he or she owns them. This can further complicate the valuation and division process. An outsider might see a particular asset-division proposal as equitable, but one or both parties might see it as unfair because of the endowment effect. The parties assign more value to one or more objects simply because of their ownership.
To further complicate things, the endowment effect may come into play even when someone doesn’t truly own the object; all it takes is for the person to have a perceived ownership.
An example of perceived ownership would be a painting that a man or woman exclusively owned before getting married. If the painting eventually hangs in the married couple’s home, the other spouse may understandably become attached to it and feel like he or she owns it. This is perceived ownership because the art was clearly owned by one party prior to the marriage and would not normally be considered marital property in Arizona.
Regardless of how Arizona law views the property, the party truly owning that piece of art might not even particularly care for it while the non-owning spouse adores it!
This illustrates why collaborative law and mediation are excellent tools for many divorcing couples. The parties can work to create an asset division they both deem fair, without a judge’s outsider perspective affecting the outcome.