#6: Valuing Assets in a Divorce
This is the sixth installment of “Divorce. What You Need to Think About from a Financial Perspective”, which can be downloaded for FREE from makara-assoc.com.
After the discovery phase, the hard work of valuing the assets will begin.
One of the first things to consider is pre-marital assets. If these exist, identify them and move forward. If you are the spouse that didn’t own those asset(s) going into the marriage, you should know that fighting over them is time consuming and expensive. If the item is truly a pre-martial asset, you will most likely lose the fight, and only end up incurring additional legal fees.
Some of the assets that are easy to value include:
- Retirement accounts
- Cash and checking accounts
- Life insurance
- Cash value
- Brokerage accounts
- Social Security Benefits
The date of valuations is the only issue that may cause questions. If the asset is subject to stock market fluctuations (i.e. retirement and brokerage accounts) that date will usually be the date of distribution. Cash balances will usually be the filing date of the petition.
If there are closely held business(s) included in your divorce; they can become very difficult to value. You should know your State’s statute on personal/professional goodwill vs. entity goodwill. You should also know the accounting method used (cash vs. accrual) to produce the financial information. This will go a long way in starting and completing a discussion on valuing a closely held business.
Appraisals by a qualified third party should be used in all cases of real estate and a closely held business that does not qualify under the professional goodwill valuation.
Going through a divorce is an extremely difficult process. Sorting through financial documents, filing taxes, and dividing assets adds an even greater level of stress, especially if you are attempting to go it alone.
If you don’t feel like waiting for the next blog post you can download this FREE resource from our eBook library.
For help with the financial aspect of your divorce, please contact me online, or call (239) 384-9688 in Naples & (239) 768-5008 in Fort Myers.
-Mark
