Divorces between high net worth couples are often some of the most complex proceedings imaginable. Part of that complexity involves a critically important step: Having your assets valued.
Valuating your asset correctly during a divorce is essential. Doing so helps keep your finances in order, and it also helps you achieve an equitable outcome for each spouse.
Proper valuation requires skilled legal help. Inaccurately evaluating items such as businesses, homes, or investments can threaten the fairness of any divorce settlement.
In this article, we broadly explore the necessity of accurate property assessment in a high asset divorce.
What Is a High Net Worth Divorce?
High net worth divorces involve couples with substantial assets. These can include anything such as properties, stocks, investments, and retirement funds.
High asset divorces require a more detailed approach. Because of the wealth involved, any small mistake could have disastrous consequences for either spouse.
How Assets Are Appraised in a High Net Worth Divorce
Typically, financial documents such as bank statements, tax returns, and investment portfolios are analyzed. Property appraisals assess the value of real estate and personal property such as jewelry, art, and vehicles.
Your property’s value can fluctuate depending on various factors such as market conditions and depreciation. Therefore, you must work with a qualified financial professional and a skilled legal team.
The Potential Consequences of Valuing Assets Incorrectly
In a divorce, poorly valuing your assets can result in an unfair property distribution. This is especially true when dealing with complex assets such as privately held businesses, stock options, and investments.
In such cases, the potential for hidden assets or undervaluation poses a challenge to asset division. For instance, an undervalued business could result in one spouse walking away with significantly less than their fair share of the marital estate.
Inaccurate valuations can delay divorce proceedings, increase litigation costs, and erode trust among spouses, particularly when one party is suspected of concealing assets.
Hiring the right legal and financial team can help ensure accurate asset valuations and effective negotiations to reach a fair settlement. Getting it right during a high net worth divorce is vital for the future financial stability of both parties involved.
How Legal Counsel Can Help Ensure Fair Asset Valuations
Consult with a lawyer who has experience in high net worth divorce cases. They can help ensure that all possible assets are identified, and valuations are conducted in a transparent, fair way.
Experienced legal counsel can also help identify any hidden assets, which is especially important in high asset divorces. Complex financial holdings may be difficult to identify without the right legal skills.
Common Mistakes to Avoid When Valuing Assets
- Failing to consider the current market value of certain assets like real estate, stocks, or business investments.
- Failing to document the valuation process carefully. Any errors or incomplete records can lead to disputes and long court battles.
- Failing to account for the tax implications of asset transfers. These expenses can significantly impact the value of the asset and have long-term financial consequences.
Russell S. Hershkowitz, L.L.C. is here to help make sure your property is fairly evaluated and distributed in a divorce. To consult with our team, call our office at (407) 753-4111 or contact us online.