How are assets valued in a Florida high net worth divorce?

Deciding which spouse gets what is quite challenging, even in the most amicable of situations. But things get especially complicated if you have to deal with a contentious high net worth divorce. When you can have your pick out of houses, vehicles, collectibles, retirement and pension plans, professional practices and licenses, stock options, and lucrative businesses, you need to be clear on their short- and long-term benefits.

However, a precise delineation needs to be made between separate and marital property. Unless previously owned assets are commingled or re-titled, things should be straightforward, and everything acquired during the marriage considered marital property.

Generally speaking, separate property may include:

• property possessed by either spouse before the marriage
• inheritance received by either spouse before or after the marriage
• payment received in a personal injury judgment for pain and suffering
• gifts received by either spouse from a third party
• assets defined as separate property in a prenuptial agreement

Determining the value of assets in a Florida high net worth divorce

Appraisal and division of assets tend to get complicated and convoluted in Florida high net worth divorces, and you will need a strong legal and financial team by your side. Many individuals might be tempted to divide their assets based on their market value. Yet, there are important aspects to consider, such as the appreciation or depreciation of the asset or any improvements made during the marriage.

You need to comprehend what better serves your short- and long-term financial security. This is where a proper understanding of liquidity, cost basis, and tax implications associated with an asset’s sale comes in.

During a high net worth divorce, the couple needs to submit financial disclosure forms listing all assets, income, and debts. The valuation methods differ based on the nature of the assets and whether the couple is engaged in a negotiation of the settlement agreement or preparing to address things in front of a judge.

Considering the nature of the assets, there are three types of high net worth marital property:

• real property - such as the marital home, land, and any other type of real estate
• tangible property - such as vehicles, jewelry, stocks, retirement accounts, or collectibles
• intangible property - such as intellectual property, trademarks, or patents

Typically, there are several methods that spouses can use to value property during a high net worth divorce:

• the cost approach - the property is valued at the cost required to replace it
• the market comparison approach - drawing a value based on the price of similar items recently sold
• the revenue approach - based on a certain type of property’s ability to generate revenue in the future

Financial instruments and accounts can be valued by account statements or with the assistance of a licensed CPA. If a business enters the category of marital property, it needs to be appraised by a forensic accountant that will review the assets and debts, the profits, and the appreciation or depreciation. Your divorce attorney can also help find experts that can value intellectual property based on their royalty rights, should the current and future value be estimable.

A high net worth divorce can be a complex process filled with unforeseen issues. Having a competent high net worth divorce lawyer by your side can help you obtain an equitable share of the assets you have worked so hard to accumulate. The Law Offices of Sean M. Cleary can assist you in your endeavors and ensure you get the best representation possible, along with a fair division of marital assets.