Complex Asset Distribution in Virginia

Whether you are getting a divorce or leaving a business, there will likely be some complexities involved, especially when it comes to splitting assets. While some assets are fairly straightforward (like bank accounts and cars), others (like retirement accounts, business ownership, and art) are a bit more complicated to value and split equitably. These more complicated interests are called complex assets. Complex assets are types of property or investments that are difficult to value, manage, or divide.

In a Virginia divorce, the division of assets is based on the principle of equitable distribution, which means the court aims for a fair (but not necessarily equal) split of marital property. The court will determine which assets are marital, with their value often determined through appraisals. The court will also determine the existence and value of any property that is separate, or that is part marital and part separate. The court will then fairly divide property having any marital interest. While a 50/50 split of marital interests is common, it is not mandatory. The court is required by statute to consider specific factors in the course of determining an appropriate allocation of marital assets and debts in a divorce and to weigh the applicable factors in the context of the facts of each individual case. Only after engaging in that evaluation can the court determine the appropriate manner of allocating the marital estate between the parties, and a court can allocate any or all assets and debts on anything other than a 50/50 split if it determines that an equal split is not equitable in the specific circumstances.

Here’s a look at complex assets and their valuation in more detail.

What are Complex Assets?

Complex assets may include the following:

Business interests. This includes ownership in closely held businesses such as Subchapter S corporations, limited liability companies (LLCs), and partnerships. They are difficult to value because there is no public market price as is the case with publicly held corporations. Value must be determined by examination of issues such as cash flow, ownership agreements, market conditions, the value of inventory and assets, and future earning potential. This evaluation should be conducted by an experienced business appraiser.
Stock options and restricted stock units. This type of asset is often a part of executive retention and compensation packages. Stock options give the right to buy stock at a set price in the future; their value depends on market fluctuations. Restricted stock units are shares given on a vesting schedule and may be forfeited if conditions, such as productivity or remaining with a company for a certain period of time, are not met. Valuation of these assets is complicated because of the many variables that must be considered, including vesting dates, market performance, and employment status.
Intellectual property. Intellectual property assets include patents, trademarks, copyrights, and trade secrets. These assets may also generate royalties or licensing income, making their value hard to estimate. Disputes often arise over ownership and revenue sharing, especially in divorce or inheritance cases.
Real estate holdings. The distribution of real estate holdings or their value is more complex when involving multiple properties, commercial buildings, or investment real estate. The marital estate may include properties in different states or countries, requiring legal and valuation work in multiple jurisdictions. Variables include market conditions, mortgages, rental income, and the existence of special circumstances such as 1031 exchanges.
Cryptocurrency. This includes Bitcoin, Ethereum, NFTs, and other tokens. Crypto assets can also include currencies in online betting and gaming platforms and apps. Funds held in apps such as Venmo and PayPal are also considered to be crypto assets. Many of the assets in the crypto universe are not tied to currencies, so their value is more relative to market conditions than regular currency. They are volatile and difficult to trace or value. Legal and tax implications are still evolving rapidly, as is the evolution in the United States of a modicum of regulation of these assets.
Art and collectibles. This includes fine art, rare coins, vintage cars, and stamps. Value depends on condition, authenticity, market trends, and appraisal expertise.

Valuing Complex Assets

Valuing complex assets requires expert analysis because these assets lack clear market prices. Common methods include:

Income, market, and asset-based approaches for businesses.
Appraisals for real estate, art, and collectibles.
Financial models for stocks.
Blockchain analysis for cryptocurrency.
Net asset value estimates for private equity and hedge funds.

Courts and financial professionals often rely on credentialed experts to ensure accurate and fair valuations.

Contact Us Today

High net worth individuals contemplating divorce face the difficulty of identifying, valuing, and explaining to a judge or mediator the nature of their complex assets. Doing so requires an attorney experienced in cases of this nature.

The Virginia business asset distribution lawyers at Culin, Sharp, Autry & Day PLC can assist you in the process of identification, valuation, and distribution of assets during a divorce or business dissolution. We are ready to advocate for your interests in the valuation and division of assets of this nature in divorce and business dissolution matters. To schedule a consultation, contact us via (703) 934-2940 or online here.