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3 assets that are hard to properly value during a Wisconsin divorce

On Behalf of | Aug 30, 2023 | Property Division

Some couples who decide to divorce in Wisconsin are able to navigate a relatively straightforward process because they have a prenuptial agreement that already explores exactly how they will divide their property in the event of divorce. However, the majority of couples will have to negotiate or prepare for negotiation and/or litigation after one spouse files to end a couple’s union.

Cases that go to court are subject to the community property standard that Wisconsin upholds. A judge will learn about the family’s circumstances, including the length of the marriage and the assets of each spouse, to decide how to divide their marital property. Regardless of whether spouses end up in court or attempt to negotiate in mediation, the three assets below can prove to be particularly challenging to accurately value during a divorce.

Real estate

In the event the parties are unable to agree on the value of real estate, they may need to engage the services of a certified appraiser whose sole job is to look at the condition of a property and the local real estate market to determine the fair market value of a property. Real estate agents may be able to provide a market analysis and suggest a listing price but if a case is headed towards litigation, parties will want to ensure they have hired a certified appraisal to provide the fair market value.

Small businesses and professional practices

Starting a business is a great way to support a family, but it can be very hard to address a business when a married owner decides to divorce. There are numerous different means of valuing a business, each with its own benefits and drawbacks. Given that everything from future sales to local consumer goodwill can be relatively subjective, it is common for people to strongly disagree with each other about what a business is actually worth.  If they reach an impasse and are unable to agree, they may need to secure the services of a financial expert to provide a business valuation.

Deferred compensation, like stock options

Successful professionals don’t just receive a salary and basic benefits. Their compensation packages often include severance pay and deferred compensation. Offering stock options or future pay based on job performance or how long someone stays with the company is a way for employers to motivate staff members to do the best job possible. Unfortunately, those deferred earnings can be very challenging to properly address during a divorce. It can be hard to put a value on future stock options or bonuses, and people may resent the idea that they have to share that unpaid income with their spouse during a divorce. Often it becomes necessary to work with a forensic economist to determine the present value of an employee benefit plan such as a pension.

Paying special attention to particularly challenging assets may help those preparing for divorce in Wisconsin to make more thoughtful decisions about their options.