A high net worth divorce comes down to numbers. Your property division will necessarily be financially complex, detailed, and intricate. Not only are there a significant number of assets to distribute, but every asset that is divided or distributed must be valued. Because of this, your property settlement exigently hinges on appraisals.
New York is an equitable distribution state, requiring assets and debts to be divided in a manner that is fair, but that doesn’t necessarily mean 50/50. Each spouse will likely receive roughly half of the net, but the court has discretion and can consider a variety of factors when determining how the assets will be divided. The secret to leveraging a property trial lies with the appraisals. Every single asset must have a value before it can be distributed to a spouse or divided by the court. And that value is where there is space for adjustment.
A valuation is necessary not only for the current value of the asset but also for the retrospective value at the date of marriage and date of separation, as well as other points in time that may be significant to your case. If the property was owned before the marriage, valuation at the date of purchase is also key.
For the best results, every single asset must be valued by an appraiser who is a specialist in that field. Each appraiser will need to be available to testify in court and describe the asset, as well as all of the valuation details and factors and the methods utilized to arrive at the stated valuation. The appraiser can only report the facts; however, what's important is that every appraiser has their own individual interpretation of value and the factors that influence it. Who your appraiser is and how they value your assets has a tremendous influence on your entire property division package.
Above all else, appraisers must have impeccable credentials and be able to provide a clear, evidence-based rationale for the values they determine. It is essential that your appraisers follow the Uniform Standards of Professional Appraisal Practice. This includes strict confidentiality so that your appraisals remain secret unless and until your legal team shares them with the court or opposing counsel.
You will need appraisals of:
Your homes may be key components of your portfolio. Many people talk about having real estate agents provide valuation, but a licensed real estate appraiser will provide you with the best, most accurate, and most comprehensive appraisal. A salient point is that Fannie Mae guidelines do not apply to this type of valuation, and the standard Uniform Residential Appraisal Report is not acceptable since that is for lending purposes only and is invalid if used for other purposes. Experienced real estate appraisers who work with high net worth divorces understand these nuances and will provide the reports needed for your case.
Business appraisals are likely at the heart of your divorce. Your case requires appraisers with detailed experience in your industry who will evaluate the current value of the business as well as its future earning potential. A thorough valuation involves general ledgers, payroll, inventory, real estate, customer lists, machinery, receivables, real estate and holdings, and more. Additionally, a comprehensive analysis of goodwill is essential to an accurate valuation.
Choosing the right appraiser is likewise imperative for artwork, jewelry, and collectibles. These items may be rare and unique, and it may be challenging or impossible to locate a comparable item that has recently sold to help establish value, so working with an appraiser who has the experience to hone in on an accurate and favorable assessment is crucial to your case.
There are several substantial mistakes to avoid when it comes to property division and appraisals. First, it is easy to have sentimental feelings about specific items that may symbolize moments, emotions, or memories you hold dear. Sentimental value, however, does not translate to appraisal value, and it is a miscalculation to seek an item simply because of how it makes you feel without taking into account its appraised value and how it impacts your entire financial case.
The other considerable mistake is not to obtain enough appraisals. You and your spouse will each want to have all items appraised by your own specialized expert appraisers, and you will want to get more than one appraisal per item so that your attorney can utilize the most favorable assessment for your case.
It's important to note that if you want to receive an asset in the division, you want it to be valued at as low a number as is reasonably possible. If your spouse is seeking a specific asset, you want the court to realize as high a valuation as possible so that it consumes more of their portion of the total assets.
Working with your legal team to obtain advantageous, accurate, and detailed appraisals will result in the best possible outcome for your divorce.