Accurately determining the value of shared assets is important but challenging in high-asset divorces. These assets often include complex and high-value items whose assessment can significantly impact the division of property.
The fair division of assets depends on their correct current and future values. Disputes can arise when parties disagree on values.
Complex assets and appraisal challenges
One major challenge is the complexity of certain assets.
- Business interests: Private business valuations depend heavily on forecasting future earnings, which can vary greatly depending on the evaluator’s methodology. The current finances must also be evaluated.
- Art and collectibles: The value of art, antiques and collectibles can fluctuate wildly based on market trends and subjective elements like artistic merit.
- Intellectual property: Assessing the value of intellectual property involves predicting future benefits, making it highly speculative and prone to undervaluation.
- Real estate: Unique properties such as luxury real estate or commercial holdings can be difficult to value due to their location, unique features and market conditions.
Other complex assets include stock options and deferred compensation. These assets are not only hard to value but also depend on future market conditions and company performance.
Expert involvement
Experts like appraisers and financial analysts play a key role in determining the value of these assets. They use various methods to estimate worth, but differing approaches can lead to disputes between parties.
Valuation disputes
To handle these disputes, parties often engage in negotiations or mediation. If they cannot reach an agreement, a court might have to intervene, sometimes ordering a third-party appraisal.
Valuation disputes in high-asset divorces require careful handling, given the complexities involved in appraising the assets. Proper valuation is necessary for ensuring a fair distribution of assets. Recognizing which assets are prone to undervaluation can help parties prepare more effectively for the challenges of dividing their property.
