Valuation issues in divorces

Posted by Lauren S. CohenMay 05, 20160 Comments

When addressing property division matters in a divorce, having a full and accurate picture of the property that is in the marital estate can be crucial. This not only includes having a solid grasp of what specific assets are in the marital estate, but also having a clear idea what the value of these assets are.

So, valuation can be a matter of major importance in a divorce. It also has the potential to be a big battleground. For some assets, what they are worth is pretty clear. However, other assets have aspects that make pinning down a value for them a more complex matter, such as:

  • The market for that asset having been very volatile lately, with values for assets of that type fluctuating significantly.
  • The asset being a rather unique asset, with not much in the way of things to compare it to when it comes to value.
  • Unique circumstances having happened to the asset which could have value implications.

When an asset has complex valuation issues connected to it, it is possible for divorcing individuals to be pretty far apart from each other in what they view the asset to be worth.

When disputes arise during a divorce over what the value of a given asset in the marital estate is, there are multiple ways the dispute could be resolved, such as through an agreement eventually being reached or the matter going through court proceedings. The different options can vary in their costs, time-frames and implications. How valuation disputes are ultimately resolved can have significant impacts for all the parties involved.

So, valuation issues are among the things it can be important for individuals to think about and make preparations for when they are entering the divorce process. The earlier potential valuation issues and potential areas of conflict over valuation are identified, the more time there is to determine what options are available for addressing the issues/conflicts and to develop a strategy for dealing with these issues/conflicts that aligns with the circumstances and one's goals. Divorce attorneys can help individuals with preparing for valuation-related matters and other matters that can be key issues in divorces.

Source: Forbes, “What I Wish I Knew Before My Divorce,” Michael Smith, May 1, 2016