A business isn’t the only asset for valuation in a Louisville divorce. Some of the most contentious valuation issues might surround a business or professional practice. However, many other types of assets present genuine challenges when working to establish an accurate valuation in a Louisville divorce. What is valuation, and why is this an essential factor when working through marital asset and property division during a divorce in Louisville or anywhere in Jefferson County?
Here in Kentucky, marital assets and debts and assets are to be divided equitably between the parties before the divorce can be completed. For a fair and equitable division of property to be accomplished, the Court must establish as accurate a valuation as possible for each marital asset. This includes everything from real property, business interests, investment accounts, future stock options and other work-related benefits, retirement and pension accounts, vehicle collections, jewelry, art, or other collectible assets.
Once an accurate valuation has been established, the Court and the parties can work toward an acceptable and equitable distribution of these assets. If the parties cannot reach an agreement or settle the matter in mediation, the Court must decide all issues associated with marital property division. It is not unusual for each party to provide their own expert(s) to testify to the valuation process and the actual value of each asset. In some cases, the Court will order a valuation and assign that cost to either or both parties.
The failure to establish a genuine, accurate valuation of any asset prevents each party from receiving their equitable share during property division in a Louisville divorce.
We have authored many blogs on the steps to establish a valuation of many types of unique assets in a divorce and determine an equitable division of all marital property between the parties. It is also important to know the tax basis of a given asset because all assets with similar valuations may not be “equal” in terms of how much they are actually worth post-tax.
Let’s consider two separate stock portfolios that each appear to be worth $250,000. Interestingly, the tax basis of one account is only $50,000, while the more recently acquired portfolio has a much higher basis of $150,000. The tax owed on the liquidation of the account with the lower basis would be much higher than the tax associated with liquidating the portfolio with the much higher basis. Both may be worth $250,000 before tax, but they are certainly not “equal” in net valuation.
The process to establish the value of each asset should be very recent as it relates to the actual distribution timeframe, either in Court or during mediation. If a significant period of time has elapsed since the actual valuation provided by one of the parties, it may need to be re-evaluated or updated before division and distribution to establish the most accurate valuation of the associated asset.
It is important to note there are as many ways to establish the valuation of an asset as there are different types of assets to be divided during a Louisville divorce. Your experienced divorce team at Dodd & Dodd has decades of experience in asset valuation and tax analysis. We watch over your interests and provide insightful information at each step in the process to ensure you accomplish your objectives and protect the things that matter most.
We invite you to review the strong recommendations of our former clients and the legal industry and contact Dodd & Dodd or call 502-584-1108 to schedule an appointment with one of our attorneys.
