In a high net worth divorce, the importance of obtaining accurate, expert valuations of expensive assets with high values cannot be overemphasized so that when it comes time to divide those assets, the division can be truly equitable.
Equitable division of a high-value marital estate
Broadly, property, money and assets acquired during the marriage by either party or jointly are marital property subject to division in divorce. The marital estate must be equitably distributed between the parties, but that does not always mean a 50-50 division. While it might, the emphasis is on fairness.
People often negotiate a marital settlement agreement in which they decide how to divide their assets (and debts). Whether the parties decide on the division themselves or the judge in the divorce does so, getting expert evaluators involved to place accurate values on complex assets is often the only way to gather the evidence needed to make the division equitable.
Valuation of significant assets can create controversy between divorcing spouses. Sometimes each one will consult their own expert on an asset and their experts may disagree, creating either the need for another opinion or a decision to compromise. If the issue is before the court, the judge must determine the value based on available evidence.
Real-life example of issues facing a judge in a divorce involving luxury assets
For example, as described in artnet News, in one New York divorce involving a wealthy couple with an art collection worth many millions of dollars, the judge decided to give the wife $40 million worth of the art, the value of which the couple could agree, and the wife had to give the husband a credit of half of this value (essentially dividing this part of the art in half, although one got the physical assets and the other a financial credit in the division). The judge ordered that the rest of the art, including a significant portion about which the couple could not agree on valuation, be sold and the net proceeds split in half between them.
Examples of high-value assets and qualified evaluators
Some of the high-value property that could be involved are:
- Yachts and other boats
- Aircraft
- Vehicles and motorcycles, including those that are collectible or luxury models
- Antiques
- Clocks
- Fine jewelry and precious metals
- Art
- Collectibles
- Technology
- Intellectual property
- High-end furniture and other household goods
- Stocks and bonds
- Coin and stamp collections
- Firearms
- Mineral, drilling and water rights
- Real estate, including luxury homes, apartments and other rental property and other commercial real estate
- Family businesses, professional practices and partial interests in businesses, including trade secrets, goodwill and customer lists
- Complex executive perks
- Retirement accounts and pensions
- Farmland, crops, livestock, equipment, vehicles and other agricultural assets
- Foreign real estate and other overseas holdings
- And others
Depending on the nature of the asset, people qualified to evaluate such property may include:
- Real estate brokers
- Appraisers
- Antique dealers
- Art experts
- Accountants
- Actuaries
- And others
Don’t forget tax ramifications
In this process of evaluating a high asset marital estate, it is also important to involve a tax specialist so that any tax implications related to disposition, gains or losses from individual assets are factored into determining an equitable division.
An experienced family law attorney will have professional relationships with experts who can assist a spouse in such a divorce with evaluating luxury assets.
