Assessing the Value of Your Assets in a High Net Worth Divorce: 8 Expert Tips
When navigating the complexities of a high net worth divorce, accurately assessing the value of your assets becomes a cornerstone of negotiations. The intricacies involved in the valuation process can significantly impact both parties’ financial futures.
In this article, we delve into expert tips that shed light on how to effectively evaluate your portfolio—from real estate holdings and business interests to investment accounts and luxury possessions. These insights, along with the help of a skilled divorce attorney, will guide you in protecting your wealth during a high net worth divorce.
This article will cover:
- Gather All Relevant Financial Documents
- Consider Hiring a Financial Expert
- Determine the Date of Valuation
- Consider Hidden Assets
- Take into Account Tax Implications
- Consider Liquidity and Marketability
- Be Prepared for Negotiations
- Consult with Your Attorney
1. Gather All Relevant Financial Documents
The first step in assessing the value of your assets is to gather all relevant financial documents. This includes bank statements, tax returns, business financial statements, real estate deeds, vehicle titles, insurance policies, investment account statements, and other paperwork that provides evidence of your wealth.
These documents are crucial as they provide a comprehensive picture of your financial landscape. Remember, it’s not just about identifying the assets but also understanding their worth. It can be a tedious process, but it’s an essential part of ensuring a fair division of assets. In some cases, you may need to work with a forensic accountant or financial advisor to help locate and interpret these documents.
2. Consider Hiring a Financial Expert
In high net worth divorces, it is often necessary to hire a financial expert to help assess the value of assets. Financial experts bring to the table extensive experience in handling intricate financial matters related to divorces, including asset valuation and assessment. They play an essential role in unraveling the intricacies of financial valuation and provide an accurate picture of your wealth.
Furthermore, if you suspect your spouse might be hiding assets, financial experts, such as a Certified Fraud Examiner (CFE) or Master Analyst in Financial Forensics (MAFF), can help uncover hidden assets. Hiring a financial expert not only ensures that you have a comprehensive understanding of your financial landscape but also equips you with the necessary tools to negotiate a fair division of assets.
3. Determine the Date of Valuation
The value of assets can change over time, so it is important to determine the date at which the assets will be valued. This refers to the specific point in time when the value of your assets is calculated. The chosen date can significantly impact the final asset division as the value of certain assets may fluctuate over time due to market conditions, business performance, and other factors.
Different jurisdictions have different rules for determining this date, and it could be the date of separation, the date the divorce petition was filed, or even the date of the divorce trial. Therefore, it’s important to consult with a legal expert to understand how the date of valuation is determined in your specific case. This will ensure that you get a fair and accurate evaluation of your assets.
4. Consider Hidden Assets
In high net worth divorces, one party may try to hide assets in order to avoid dividing them during the divorce. Hidden assets refer to any property or assets that are not immediately visible or significantly undervalued. They can include things like off-balance-sheet investment holdings, natural resource reserves, or even brand equities.
In the context of a divorce, hidden assets could be marital or personal property that has been concealed, understated, or undervalued. Some common methods for hiding assets include cash conversion into property or undisclosed property ownership.
If you suspect your spouse might be hiding assets, it’s important to conduct a thorough asset investigation. This could involve checking tax assessor’s office records, tracking unusual financial activities, or even hiring a forensic accountant. Remember, hiding assets is considered fraud and can have serious consequences.
5. Take into Account Tax Implications
When assessing the value of assets, it is important to take into account any potential tax implications. The division of assets can significantly influence your tax liabilities, and not considering this could lead to unexpected financial burdens post-divorce.
High-value assets such as trusts, real estate properties, retirement funds, and investment portfolios may have different tax treatments when transferred or sold. It’s crucial to work with a tax expert or a financial advisor who can help navigate the complex tax landscape and minimize potential tax liabilities.
6. Consider Liquidity and Marketability
Considering liquidity and marketability is an important aspect when assessing your assets in a high net worth divorce. Liquidity refers to how easy an asset can be converted into cash without it negatively affecting the price much. Assets like stocks, bonds, and money market funds are generally considered liquid, whereas real estate properties, businesses, and art collections may be less liquid.
Marketability, on the other hand, pertains to the ability to sell an asset without a significant discount. Assets with high marketability are easier to sell at a fair price. In a high net worth divorce, understanding the liquidity and marketability of your assets can help you make informed decisions about asset division.
7. Be Prepared for Negotiations
Divorce is a negotiation process, and it is important to be prepared for these negotiations when assessing the value of your assets. This involves understanding your objectives, having a clear idea of the power dynamics, and being ready to communicate effectively.
Thorough preparation can account for over 80% of the negotiation outcome. Therefore, knowing what you hope to achieve, understanding your priorities and needs, and having a clear idea about your non-negotiables are crucial.
8. Consult with Your Attorney
Finally, it is crucial to consult with your divorce attorney throughout the process of assessing the value of your assets. They can provide valuable guidance and advice on how to protect your assets and ensure that you receive a fair division of property.
If you’re looking for a trusted Milwaukee divorce attorney, look no further than Ohiku Law. Our team of experienced attorneys specializes in high net worth divorces and will work tirelessly to protect your assets. Contact Ohiku Law today for a free consultation, and let us help you navigate the complex process of assessing the value of your assets in a high net worth divorce.
By Attorney Odalo Ohiku, Owner of Ohiku Law Office
Attorney Odalo Ohiku is a dedicated and experienced lawyer who focuses on divorce law, family law, and custody and placement for high-net-worth individuals in the Greater Milwaukee area. A trained mediator and arbitrator, Attorney Ohiku has the skill set, experience, and perspective to help clients safeguard their interests while minimizing the stress, anxiety, and conflict that can come with divorce. Attorney Ohiku’s credentials are exemplary: he has been honored as a “Top 40 under 40” by both The American Society of Legal Advocates and The National Trial Lawyers, served as Chair of the Wisconsin State Bar Board of Governors, and earned the President Award from the Wisconsin State Bar. He is passionate about his work in safeguarding families, ensuring that they can maintain the lives they have worked hard to build.
