Divorce is never easy, especially when significant assets, including businesses, are involved. Your business represents your years of hard work, dedication, and financial investment.

Dividing substantial assets introduces added complexity, often fueling heightened emotions and potential conflict. Such conflicts can prolong the process and escalate financial expenses in high-net-worth divorces.

Business valuation in high-asset divorce cases is pivotal for several reasons. Primarily, it serves as the foundation for equitable distribution of marital assets. In Florida, equitable distribution does not mean equal but rather what the court deems as fair under the circumstances, considering various factors such as the contributions to the marriage, duration of the marriage, economic circumstances, and more.

What Is a High-Net-Worth Divorce?

A high-net-worth divorce typically refers to a marital dissolution involving significant wealth, often exceeding $1 million in liquid assets. These include many types of assets, from properties and businesses to investments, retirement funds, and luxury possessions. In such divorces, the primary concern extends beyond mere asset division; it involves precise valuation of assets and equitable distribution to ensure both parties receive a fair share.

Valuing Your Business as a Marital Asset

In high-asset divorce cases, businesses owned and managed by one or both spouses often come into play. When assessing your business as a marital asset for property division, you typically have three valuation methods at your disposal: the market approach, the asset approach, or the income approach.

  • Cost or Asset-Based Method: This method determines a company’s worth by evaluating its assets’ value minus any liabilities. While this approach may establish a minimum value for the company, it often underestimates its true value, especially when goodwill plays a significant role. For instance, businesses like souvenir stands, which rely on one-time customers and where ownership changes have little impact on clientele, may find this method suitable.
  • Market Method: This approach relies on transactional data, including private or public company sales and stock market data. It proves useful when sufficient data on similar businesses sold under comparable conditions provides insights into potential selling prices.
  • Income Method: Here, the business’s value hinges on its current earnings and projected income. Appraisers employ formulas to discount expected future income and economic benefits to present value. This method is widely used due to its reliability.

Is My Business Separate or Marital Property?

Your assets will be categorized as separate or marital property during your divorce. Separate property includes possessions acquired before the marriage, while marital property comprises assets acquired or accumulated during the marriage.

Certain assets, such as inheritances or compensation from personal injury claims, may be excluded from marital property. Additionally, it’s crucial to understand that even if you initiated and acquired a business before your marriage, it could still be considered marital property. A business that would typically be classified as separate property may fall into the marital category under the following circumstances:

  • The non-owner spouse contributed to the business’s growth or maintenance.
  • The income or resources generated by the business benefited the marriage.
  • The business’s income or assets are commingled with other marital property.

How Is Marital Property Divided in Florida High-Asset Divorce?

Florida follows the principle of equitable distribution when dividing marital property in divorce cases. When it comes to typical divorces, things often proceed smoothly. However, the process becomes complex and sensitive when dealing with high-value assets, such as shared businesses or investments. Unlike in standard cases where assets are divided evenly, our high-asset divorce lawyers can guide you through this intricate division process, ensuring your interests remain protected.

Factors Considered in Equitable Distribution

When determining how to divide marital property in high-asset divorce cases, Florida courts consider various factors to achieve an equitable distribution, including:

1. Contributions to the Marriage

Courts assess each spouse’s contributions to acquiring, enhancing, or preserving marital assets. This includes financial contributions and non-monetary contributions such as homemaking and child-rearing.

2. Duration of the Marriage

The length of the marriage is a significant factor in property division. Longer marriages typically involve more extensive marital assets and may result in a more equitable distribution.

3. Financial Circumstances

Courts take into account the financial circumstances of each spouse, including their income, earning capacity, financial needs, and obligations, when determining the division of marital property.

4. Non-Marital Assets

Assets acquired by either spouse before the marriage or through inheritance or gift during the marriage are generally considered non-marital and may not be subject to equitable distribution.

5. Dissipation or Waste of Assets

If one spouse has dissipated or wasted marital assets, such as through reckless spending or improper conduct, the court may consider this factor in property division.

Impact of Hidden Assets

A fair asset division hinges on a transparent assessment of all assets involved. However, this transparency isn’t always forthcoming.

Assets can be deliberately concealed through tactics like stashing funds in offshore accounts, deferring benefits, or making questionable transfers to relatives or acquaintances. Sometimes, assets are inadvertently overlooked due to complex ownership structures or financial arrangements. Regardless of intent, failure to properly account for assets can result in skewed calculations for alimony and child support.

Our firm collaborates with seasoned professionals, including investigators and accounting experts, to meticulously scrutinize financial records for signs of concealed assets. We would also:

  • Precisely assess the value of your marital assets
  • Evaluate the tax ramifications of potential property distribution arrangements
  • Verify the proper disclosure and reporting of all income, assets, and liabilities
  • Provide testimony in family court, if required, to advocate on your behalf.

How Long Will a High-Asset Divorce Take in Florida?

High-asset divorces are often lengthy. This is primarily due to the extensive documentation and paperwork required to accurately assess the total value of the couple’s assets. Certified Public Accountants (CPAs) and property valuation experts are crucial in scrutinizing these figures and determining asset valuations. Furthermore, once values are established, disagreements commonly arise regarding the equitable distribution of assets.

Several factors can contribute to the extended duration of a high-asset divorce. Allegations or suspicions of concealed assets may necessitate thorough investigation, prolonging the process. Additionally, prenuptial or postnuptial agreements can either streamline proceedings or introduce complications, depending on challenges to their terms or validity.

In summary, high-net-worth divorces typically require a minimum of one year before finalization, although some cases may extend for years.

How We Can Help With Your High-Asset Divorce Case

Divorce proceedings involving significant assets can be emotionally taxing and legally intricate. At Wendy Doyle-Palumbo, we understand the complexities of high-asset divorces and offer comprehensive legal assistance to help you navigate this challenging terrain confidently and clearly.

1. Strategic Planning

Advocacy in a high-asset divorce requires a strategic approach tailored to your circumstances. Our experienced legal team will work closely with you to develop a personalized strategy to achieve your goals while protecting your financial future.

2. Asset Identification and Valuation

Identifying and valuing marital assets is a critical aspect of the divorce process. We will conduct a thorough analysis of all marital property, including real estate, investments, businesses, and other assets, to ensure equitable distribution in accordance with Florida law.

3. Business Valuation

If you or your spouse owns a business, determining its value is essential for a fair division of assets. Our firm has extensive experience in business valuation matters, collaborating with financial experts to accurately assess the worth of business interests and advocate for your rightful share.

4. Complex Financial Analysis

High-asset divorces often involve complex financial portfolios and intricate asset structures. Our team has the expertise to analyze financial documents, including tax returns, bank statements, and investment accounts, to uncover hidden assets and ensure a fair division of property.

5. Negotiation and Mediation

While litigation may be necessary in some cases, we explore alternative dispute resolution methods such as negotiation and mediation whenever possible. We aim to reach amicable agreements, prioritizing your interests while minimizing conflict and avoiding protracted courtroom battles.

6. Litigation Advocacy

In cases where litigation is unavoidable, you can rely on our skilled litigators to provide vigorous advocacy on your behalf. We have a track record of success in the courtroom and will fight to protect your rights and achieve a favorable outcome.

Other Considerations in High-Net-Worth Divorces

Divorces involving substantial assets can be complicated, yet litigation isn’t always the optimal route for all parties involved. Even in contested divorce cases, alternative dispute resolution methods or collaborative divorce may offer viable avenues to resolve areas of contention. These approaches come with several advantages:

  • Preservation of Personal Relationships: Alternative methods mitigate conflict between spouses, reducing strain on children and other family members.
  • Protection of Privacy: Collaborative divorce and alternative dispute resolution processes maintain confidentiality, minimizing the disclosure of private information in public records.
  • Flexibility: Unlike court-litigated divorces, alternative approaches provide room for creative solutions that cater to interests beyond mere asset division. For instance, if both spouses wish to retain ownership of a family business, structuring a buy-out of one spouse’s share by the other may be the most beneficial arrangement.

Contact Doyle-Polumbo Today for Your High-Asset Divorce Case

If you are facing a high-asset divorce in Florida and need guidance on property division or equitable distribution, contact Wendy Doyle-Palumbo for a confidential consultation. Our experienced, high-asset divorce attorneys are dedicated to providing the support you need to navigate the complexities of property division and secure your financial future.

Contact us at (727) 788-6007 for a consultation.