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Determining asset value during a high net worth divorce

On Behalf of | Oct 22, 2023 | Property Division

One of the most basic requirements of divorce in California involves dividing the value of a couple’s marital estate. Dividing both property and debt are parts of this process. Couples either negotiate a settlement or prepare to present their case to a family law judge in court. State law mandates that judges utilize the community property approach when dividing resources in a litigated California divorce.

In order to allocate an appropriate portion of the marital estate to each spouse, it is of the utmost importance to determine what assets are truly worth. This can be particularly difficult to achieve when a marital estate is sizable and includes a variety of different assets. There are a few things that people need to keep in mind as they seek to properly value their assets when preparing for a divorce featuring a substantial amount of marital property.

Professional support is key

Asset valuation is more complex than people realize. It does not simply involve looking at what people paid for assets but instead reviewing what they are currently worth. Establishing the fair market value for assets can result in a more accurate property division outcome than simply deferring to the purchase price for those assets.

Members of the general public often do not have the knowledge necessary to properly value assets. It may be necessary to partner with financial professionals to achieve this goal. For example, an appraiser or a real estate agent will have an easier time determining what real property is worth than the average individual would. People may also need assistance valuing other resources such as home furnishings, vehicles, collectibles and other personal property.

Certain assets will already have a set value attached, such as financial accounts with a specific balance. Other resources, like a small business owned by the family, can be particularly complex to value as there are multiple different approaches to managing that process. For many people attempting to value marital resources, creating an exhaustive inventory of assets will be the first step.

They can then discuss those resources with their attorney to determine which assets may warrant professional valuation. In scenarios in which spouses disagree about the value of specific assets, they may need to split the difference. An example would be when each spouse hires an appraiser and each appraiser returns a different property value.

For many couples in high-asset marriages, negotiating the value of the marital estate will be as big of a challenge as making arrangements to actually split those resources later. Ensuring that the inventory of the marital estate includes all assets and that those assets have been assigned appropriate values is important enough for those preparing for divorce in California that affected individuals generally benefit from seeking legal guidance as proactively as possible.