One of the thorniest problems faced by a wealthy Texas couple who have decided to end their marriage is valuing their assets. Some couples are able to agree on the value of their assets or on a method of dividing their assets that both consider fair, but many couples cannot agree on the value of their assets. Such disagreement is especially common in the case of income producing assets, such as a small business, that the couple has owned for many years.
Texas is a community property state, which means that all assets acquired during the marriage must be divided equally. This rule does not mean that each asset must be split financially. Instead, the division of assets must, in the end, award an equal share to each spouse. Thus, determining the value of a couple’s assets can be a major problem in resolving the divorce. The most common solution is to hire one or more experienced appraisers to determine the value of the couple’s assets.
Most appraisers use one of several methods to determine value. For real estate, especially residential real estate, an experience appraiser will attempt to determine the price for which homes of a similar size and location have sold. This method, called the market value approach, will then be used to determine a comparable value for the couple’s home. If the asset is a business that is closely owned, the appraiser can resort to the company’s past earnings history and project a profit stream into the future. This profit stream can then be discounted to present value to support an estimate of the business’ worth.
Valuing unique assets, such as works of art or rare antiques, may require even more expertise to determine value. Knowledgeable appraisers can hire specialized appraisers to value these assets.
Determining asset value in a high asset divorce should not be left to guesswork. Retaining a knowledgeable and experienced appraisal firm can assist both parties in dividing their assets. Even if the parties do not agree on value of specific assets, the report of a reputable appraiser can be a useful tool in the courtroom.