Legal Definitions - worth

Worth refers to the value attributed to something, which can be expressed in various ways, such as its monetary price, its emotional significance, or the overall financial standing of an individual or entity.

• Monetary Worth: This refers to the financial price or market value of an item or service, often determined by its utility, demand, and the cost of similar items in the current market.

  • Example: A homeowner might hire an appraiser to determine the worth of their house before putting it on the market. The appraiser considers factors like recent sales of comparable homes, the property's condition, location, and any renovations to arrive at a fair market value.

    Explanation: This illustrates monetary worth because the value is expressed as a specific financial amount that the house could realistically be bought or sold for in the current real estate market.

• Sentimental Worth: This describes the non-monetary importance or significance an item holds for an individual due to personal memories, attachments, or emotional connections, rather than its market price.

  • Example: An old, faded photograph album containing pictures of a person's childhood and family history might have very little financial worth if sold, but its sentimental worth to that individual is immense due to the irreplaceable memories it preserves.

    Explanation: This example highlights sentimental worth because the value is not about money but about the deep personal and emotional significance the item holds for its owner, stemming from cherished memories and personal history.

• Net Worth: This is a financial calculation representing the total assets (what someone owns) minus their total liabilities (what someone owes). It provides a snapshot of an individual's or company's overall financial health.

  • Example: A recent college graduate might calculate their net worth by adding up their savings account balance and the market value of their car, then subtracting their student loan debt and any credit card balances. If their debts exceed their assets, they would have a negative net worth.

    Explanation: This example demonstrates net worth as a financial measure of overall wealth, derived by subtracting all financial obligations (liabilities) from all owned assets.