High Net-Worth Divorce in Los Angeles and Ventura

Many divorces in Los Angeles and Ventura involve high net-worth. These types of divorces can be lengthy and complicated. A high asset divorce will require experienced legal counsel to make sure the process is fair and just for both parties. Below is a little more information on what divorces involving high net-worth may entail.

What constitutes a high-asset divorce in California? 

Assets in California include everything from tangible property to intangible assets. Any asset obtained during the marriage is typically considered joint or community property. Examples of assets include:

  • investments
  • real estate
  • financial accounts
  • stock options
  • retirement benefits
  • pension benefits
  • intellectual property
  • businesses.

There isn't a legal definition to distinguish a high-asset divorce versus any other divorce. Typically, when assets are liquidated, the divorce is a high net-worth divorce if the net liquid assets total at least $1,000,000. 

How are assets valued in high net-worth divorces?

There are many methods to value assets in a high net-worth divorce. One thing that is certain is experts will be necessary to analyze the worth of many different types of assets, especially those assets that are intangible.

Consider business or professional practice as an example. Businesses are community assets if built during the marriage and sometimes if started before the marriage. Businesses have attached to them tangible and intangible worth. The physical aspects of the property are tangible and can be more easily assessed than the value of its intangible parts. Much of this "intangible" part is referred to as goodwill. Goodwill is intangible property and its worth is in excess of the physical assets of the business.

Tangible property of a business or professional practice include:

  • physical assets (e.g., equipment, property)
  • net proceeds
  • spousal labor.

Intangible property of a business or professional practice include:

  • advertising
  • systems and controls of the business
  • location 
  • repeat customers/clients
  • workforce skill and training. 

To derive at a value, two basic but different approaches may be taken:

  1. market value approach; or
  2. excess earnings approach.  

The market value approach considers what someone would pay for the business or professional practice. The excess earnings approach is a bit more technical and uses an equation that accounts for:

– the value of the business
– the earnings attributable to a return on assets
– the appropriate rate of capitalization for earnings attributable to net tangible assets
– the earnings in excess of those attributable to a return on assets
– the appropriate rate of capitalization for earnings attributable to goodwill.the value of the business
– the earnings attributable to a return on assets
– the appropriate rate of capitalization for earnings attributable to net tangible assets
– the earnings in excess of those attributable to a return on assets.

As you can imagine, either process is highly technical and complex. California courts often prefer the excess earnings approach because it can deliver a more comprehensive and precise amount. At the same time, it is also a much more complicated valuation calculation. To ensure that the assets are valued properly, it is important to retain a family law attorney who has a thorough understanding of these methods. 

What happens after assets are valued in a high net-worth divorce?

After the value of your assets has been determined, the court will divide the property. When it comes to things like a business, real estate, and other large assets, once the value is known, one spouse may have the option to buy out the other spouse's share.

Contact a High Net-Worth Divorce Attorney in Thousand Oaks Today

When there a divorce involves high net-worth, the stakes are high. Much of the process will involve valuing tangible and intangible assets. It can be a long process, but a necessary one. Having a skilled high-asset divorce attorney guide you through the process can benefit you in many ways.

Contact Certified Family Law Specialist to learn more about his approach to family law and how he can help you with your high-asset divorce in California.

Focused Preparation & Client Involvement

We provide aggressive negotiation on behalf of our clients. You can expect clear communication from our firm at every step of the process.

We're Here to Help You, Contact Us Today

Let us provide detailed and helpful legal advice in your family matter. Call us today at 805-449-4290 to find out how we will fight for your rights.

Copyright © 2020 Hoffer Family Law Firm

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.