A divorce involving significant assets can get complicated quite fast, but it doesn't have to be.
Houses, artwork, businesses, and stock options can present some trickier valuation issues, which is why we often recommend hiring a professional appraiser and working with a divorce attorney experienced in dealing with high and complex asset division.
Valuation of Assets
One consideration: each spouse hires their own expert, or you hire a joint expert.
We tend to favor joint experts, as long as both sides can agree on someone they both trust. The problem with having separate experts is that that builds in an additional conflict to work through, as inevitably the two experts will come up with somewhat different estimates, which just makes it that much harder to come to agreement.
Seattle divorce attorneys typically know many of the same experts and can come up with some joint recommendations. Make sure and discuss the best approach to take with your Seattle family lawyer.
See: Valuation by Asset Type
How a Lawyer Can Help: Appropriate and Fair Distribution of Assets
When settling a high-asset divorce, it's important to look at which assets are most appropriate for each person.
A collector car is probably much better staying with the car collector who will get the most enjoyment out of it and know how to properly maintain it. The large house might be better with a parent who is going to be caring for the children more of the time. A business will generally stay with the person who has been managing the business.
If there is a large asset that for one reason or another is better kept by one party rather than liquidated, then we look for ways to balance that out another way. The options may include awarding another large asset to the other party, having the first party take on more of the community debt, or working out a plan for a buy out over time. Your Seattle family lawyer can help you look at what is going to be most important for your future.
Your complex asset portfolio needs to be treated with care to preserve the most value for you and your family's future.
Planning for Your Children
It's common for couples to discuss couples setting aside funds for their children.
These funds may be to pay for college, to help them get started in adult life (e.g. to help purchase a first home), or inheritance. regardless, they can managed a variety of ways. They may be…
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- placed into an outside trust of some kind,
- held by one parent in trust, or
- held in an account that continues to be managed by both parents
Before agreeing to long term joint management, you need to be sure you are confident the two of you can continue to cooperate in that way or have a solid dispute resolution plan.
Ensuring Your Financial Stability
To have a comfortable future, assets and cash flow need to be balanced to meet your needs.
It’s important that both parties will have good cash flow post-divorce. Taking on a large expensive house would not make sense if you were not going to have the funds to pay the mortgage and meet other normal expenses. Choosing assets that are liquid or provide payouts over time (like investments or retirement plans) can provide some of this cash flow.
Alimony also plays a part in the cash flow picture.
A party might take a larger amount of alimony rather than more property, or a party might choose to take more property and less alimony. This all depends on what is more likely to meet one’s individual needs. Your Seattle high asset divorce attorney can help you understand the relationship between alimony and property division, or even help connect you with a divorce financial planner for assistance.
The Collaborative Divorce Method
High-asset couples often avoid having a contentious, litigated divorce where their decision-making power is removed and granted to the Court.
The Collaborative divorce method provides both parties with the freedom and support to design outcomes far better suited to their individual needs and circumstances than any court could come up with. Couples will have the benefit of a neutral financial planner and professional (CDFA) to assist their transition into financially separate lives.
When needed, couples can also engage a neutral communications and/or parenting coach to ease any residual emotional tension which proceedings may cause. In all, the collaborative method helps to preserve the relationships spouses still have as they move into this new chapter of life.
Valuation by Asset Type
HOMES
Houses are hard to value because usually every home is different. Even a very similar home in a different neighborhood may be worth much more or much less. Ultimately a house is worth whatever someone is willing to pay for it, and what that amount is, is always at best an educated guess. With houses, an alternative to hiring an appraiser is to have a real estate agent do a market analysis. However, a real estate agent may have some tendency to value the property higher as in their work they normally start at the top value and reduce the price over time.
STOCK OPTIONS
With stock options it is less a question of the value itself and more how much of that value is community property and how much is separate. One factor is whether the stock was granted as a reward for past service or as an incentive for future services. To the extent that it is a reward for past service, then it is more likely to be community property. However, to the extent it is an incentive for future services, we often have to look at the percentage of the time of the grant which is before separation vs the percentage that is after separation.
BUSINESSES
Business valuation is typically done by a business appraiser. This may be someone who works with buying and selling businesses, but more typically we like to use an expert who works in the more specialized area of valuing businesses in divorce. There are several different approaches to business valuation that can be taken, and the expert should be familiar with all of them and be able to discuss why a particular approach is most suitable for a specific business. With some types of businesses, it may be appropriate to look at what it might sell for, but other types of businesses (say a medical practice) may not be very salable and are better valued based on the income they will continue to provide to the current owners. For professional practices, we may also need to look at whether owning the business provides more than income that doing the same job for a different employer would.
ART
Art value is even more subjective, but if there are high value pieces, finding the right expert is especially important. Hopefully this would be someone who is familiar with the market for that particular artist’s work. If there are a number of pieces from different artists, it may be more complicated and could even mean needing to consult with more than one expert.
Your complex asset portfolio needs to be treated with care to preserve the most value for you and your family's future.
When significant assets are involved, it is important that you work closely with an experienced attorney to ensure a good financial future.