How Will The Pandemic Change How Marital Assets Are Valued In Divorce? Orlando Divorce Lawyer
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How Will the Pandemic Change How Marital Assets Are Valued in Divorce?

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We previously discussed why you need a valuation expert for a high asset divorce: Dividing up marital assets in divorce can be challenging for everyone, but it can be especially difficult when you are dealing with assets that are difficult to value in complex divorces, such as stock options and businesses.

This is especially true at the moment due to the impact that the coronavirus has had on the economy: Unless there was a specific pre- or postnuptial agreement in place preventing a business or another high net worth asset from being divided in the event of divorce, many business owners who settled their divorces right before the pandemic had its effect on the economy are now left trying to salvage what is left after their business was split with their spouse based upon an artificially-high value that is no longer the reality in our economy.

Real World Inequities Caused by Poor Valuations

Unfortunately, these divisions can result in some serious real-world inequities: Take, for example, cases where the courts refused to address marital agreements even though they resulted in the non-spouse owner walking away with millions before the pandemic struck, while the owner spouse lost the entire business to the pandemic.

In fact, this has been an issue in Florida even prior to the pandemic, where, because marital assets are split based on equitable distribution in a divorce, if a business or stock is valued higher or lower than it should be, one spouse can end up receiving a significantly higher share of the overall estate. As a result, appraisers end up having a significant amount of power when it comes to property division in a divorce.

A Potential Solution: Arguing for Alternative Valuation to The Courts

The tradition of valuing a business as of the date that the divorce is commenced or the date of the trial are both problematic in terms of changes in values triggered by events like the pandemic. Because there is no way to address an inequity like this after a divorce has already been settled, some are considering, instead, the possibility of arguing to the court that non-owner spouses should be awarded a portion of the actual earnings of the business after divorce instead of a portion of the value that is set by an expert; precisely because unexpected events like pandemics can have such a significant effect on the markets and thus the value of high net worth assets like businesses.

This inevitably means that divorce attorneys handling complex divorces will not only need to be open-minded, but make compelling arguments that the courts must do the same in order to split marital assets in a truly fair and equitable manner between the parties.

Contact Our Florida Divorce & Family Law Attorneys to Find Out How We Can Help

Find out more about how our experienced Orlando divorce attorneys can assist you with any and all property division issues today by contacting the Arwani Law Firm, PLLC and obtaining a free phone consultation.

Resources:

law.com/newyorklawjournal/2020/05/04/equitably-distributing-business-values-post-pandemic/

casetext.com/case/simkin-v-blank

https://www.arwanilawfirm.com/if-i-am-a-doctor-or-first-responder-fighting-the-pandemic-could-i-lose-custody-of-my-kids/

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