Dividing assets during divorce can be complicated and time-consuming. In Nevada, Nevada Revised Statute (NRS) 123.259(3)(a) requires that a Judge entering a Decree of Divorce to dissolve a marriage in Nevada must divide the assets and/or debts of the parties equally amongst them.
Identification of Marital Assets
The first thing the Judge must do is evaluate the breadth and scope of the marital estate. This typically occurs by the parties preparing a Proposed Community Property Division sheet (PCPD), sometimes referred to as a "Marital Balance Sheet." The PCPD or marital balance sheet details every asset or debt the parties own. This includes bank accounts, retirement accounts, residential and commercial real estate, vehicles, and other items. After the assets have been enumerated, the parties must determine the actual present value of their property. That can be accomplished by hiring a third-party professional appraiser or by mutual agreement of the parties. Once the current values of the property have been determined, the parties must determine any outstanding debts, known as "encumbrances," on the property.
Valuation of Business(es)
Typically, when a divorcing spouse owns/operates or is a shareholder of a business(es), the business(es) must be valued separately by a third-party professional appraiser known as a Certified Business Valuator (CBV). A CBV is a certified accountant with additional licenses and credentials that give them the requisite knowledge and ability to determine the present value of a business. There are several approaches that a CBV uses to determine the value of a business based on the type of business it is, where it is located, whether the business performs services or manufactures something, or how much revenue it generates.
Three Approaches to Determining the Value of a Business
The first approach is known as the Market Approach. With the Market Approach, a CBV determines what a similarly situated business of comparable size and market in the area would be to purchase. The second approach is known as the Asset Approach. With the Asset Approach, a CBV determines what assets the business holds, what the aggregate amount of its materials, equipment, and stock are worth, and determines value based on what the business holds. The third approach is known as the Income Approach. With the Income Approach, a CBV determines the business's annual revenue, debt load, and what the future growth and market of the business will likely be over several years. Typically, with the Income Approach, the CBV will determine a multiplier of revenue to determine the overall worth of the business.
One of the most complicated parts of evaluating the value of a business or other active asset is the concept of "goodwill." Goodwill describes an intangible variable for valuation that is hard to measure. Most commonly, goodwill means business relationships and/or contracts that the business does not now have but could in the future.
The Importance of Negotiation
Once the identification of the parties' assets has been established, and the determination of value and debt has been ascertained, the parties can start negotiating property division. It's possible to work together with your spouse to find a common agreement when dividing assets during divorce. Many couples go through mediation before seeking the assistance of a judge and going to court. When you can negotiate with your soon-to-be-ex-spouse, the process of dissolving a marriage is much faster, smoother, and less acrimonious. Regardless of the best intentions of the parties to mediate, negotiate and settle a divorce, sometimes a case must proceed to trial for resolution.
Hire an Experienced Attorney
Divorce can be costly, especially when parties have many high-value assets at stake. It's essential to have legal counsel who can help navigate the system, assist in the valuation of your assets, and negotiate a final resolution. If your case ultimately proceeds to court, it is essential to have an attorney who is an expert in family law. An attorney with the requisite knowledge and experience can protect your rights and ensure a fair settlement. Here at the Leavitt Family Law Group, we have years of experience helping people in your situation. We are here to help. Give us a call at 702-605-0065 or contact us online, and we will schedule a consultation right away.