Couples planning to divorce must determine the value of undivided real estate and other types of assets. Not every divorce ends in a 50/50 division of property.
The division of community property involving a business entity jointly owned by the divorcing couple, shareholders, and investors can pose problems. Selling the business and splitting the proceeds between the husband and wife may not be feasible. In some cases, the equitable solution requires assessing the value of each party’s share in the business’s profits. They then allow the business to remain operational as before.
Assessing Each Party’s Net Worth
Assessing each party’s individual net worth necessitates the determination of all undivided property. Knowing the net worth of each party to the divorce can affect division of the marital property. For instance, the party with lower income may receive a higher percentage of the overall value of the marital property. If the business commenced after the marriage, an assessment of undivided assets will show the percentage of the initial investment belonging to the husband and wife individually. When there are several owners, the original purchase agreement reflects the portion of the business entity belonging to the divorcing couple.
Sometimes the value assigned to undivided property results in a discounted amount. This means the assigned value used to determine net wealth shows a figure lower than the true value of each spouse’s interest in the property. This valuation is beneficial for tax purposes, but not advantageous for the individual owning the lesser share of the undivided assets. The lower valuation of undivided assets can be detrimental in the distribution of marital assets. A reputable divorce attorney can help you make decisions involving undivided assets in such a way that represents the assets’ true values. You don’t have to settle for a split that simply assigns easily defined shares.
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