Valuing Investments in a Florida High Net Worth Divorce

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In a Florida high asset divorce, all marital property needs to be divided between the parting spouses in a fair and equitable manner. This implies that the court must identify, value, and distribute the significant marital assets.

Making sure all assets are accurately valued can be a complicated affair when it comes to investments. There are different types of investments that do not only require determining what they are worth but also if they are considered assets or income streams. An experienced high net worth divorce attorney regularly deals with high asset investments and can help you overcome obstacles involving the distribution, transfer, or sale of investments.

Investments in a High Asset Divorce Are Difficult to Value

Asset valuation must be supported by substantial evidence in Florida courts, which is why it is highly advisable that parting spouses retain the help of an expert instead of just deciding on a value between themselves so as to avoid errors in valuation that might cost either of them large sums of money.

Under Florida law, asset division is settled through equitable distribution, dividing marital property in a fair and equitable manner. Investments may represent the greatest part of the marital estate, which is why it is essential to present the court with consistent evidence as to their value so that they can be properly distributed between the spouses.

Furthermore, even if the parties decide to reach a settlement, they cannot do so until an accurate picture of the assets' value has been obtained, including investments that are difficult to value. Such complex assets must be valued not only with consideration to their current value but also the potential value they might have in the future. This is particularly important in the case of assets that generate an income stream - an ongoing source of income. The court will consider the income stream when determining alimony or child support.

Valuing investments in high net worth divorce cases is a lengthy process that, in some cases, may turn out to cost more than the investment is worth. Nevertheless, depending on the type of asset and disclosed information, different valuation methods can be employed in every circumstance:

  • The "book value" method - utilizing the information reported on the financial statements and tax returns, this approach calculates the fair market value of the investment based on its book value and ownership interest. This procedure reflects the initial investment, subsequent contributions and withdrawals, and the investor's percentage share of reported income or loss.
  • Recent valuations performed by the company - the information from prior valuations that the entity might have obtained from previous divorces of other owners or other litigation can be used in the ongoing high net worth divorce matter. In case prior valuations have been used for different purposes (like buy-outs or liquidations), they might not prove fit for your current high net worth divorce purpose, as they could result in different values.
  • The "return of investment" approach - consists of an estimate of the appreciation on an investment where the actual return won't be determined until liquidation. This method requires extensive research and is based on historical returns of similar investments or the projected return on the investment. The next step requires applying the present projection to the investment and discount to the current value, providing a reasonable valuation based on the available information at the time of valuation.

Work with Sean M. Cleary - An Experienced Florida High Net Worth Divorce Attorney

As a high net worth individual, there are numerous concerns that need to be recognized and addressed by a professional who can successfully handle the complexities of legal proceedings.

When significant assets are at stake, such as investments or stocks, you need strong legal counsel to forcefully advocate for your rights and best interests. The accomplished Florida high asset divorce attorney at The Law Offices of Sean M. Cleary will develop a solid strategy to help ease the burden of your divorce and obtain the best financial outcome.

Contact our law firm today to set up your initial consultation and subsequent legal approach.

Disclaimer: Please note that the information provided on this site is not formal legal advice, also the site does not allow you to form an attorney-client relationship.