A. Stock Options: How to Value, How to Distribute and When
Stock option is a contractual right to purchase stock during a specified period at a predetermined price. Increasingly, corporations are granting stock options to employees as compensation for services that have been, or will, be performed. The increasing use of employee stock options has translated into expanding litigation concerning whether stock options are marital property, and if so, how they should be valued and divided.
In evaluating whether an employee stock option constitutes a “property” interest, the standard is whether it is “vested”. A non-vested stock option is treated as a mere expectancy because the holder has no enforceable rights. Therefore, non-vested stock options are not “property” and are not subject to division, even though the ability to exercise the option is contingent on passage of time or continued employment. So long as the employer cannot unilaterally repudiate the option, it should be deemed “vested” and therefore “property” in divorce law. When the option-holder has the absolute right to exercise the option at any time by payment of the option price, the option is said to be both “vested” and matured. Once an option is determined to be “vested,” and therefore a “property” interest, the next step is to classify that interest as either marital or separate property. On the other hand, an employee stock option granted in consideration of future services does not constitute marital property until the employee has performed those future services. Whether an employee stock option is characterized as being granted in consideration of past or future services depends upon the circumstances surrounding the grant and the effect of the option agreement. The determination may depend upon such factors as the flexibility and variety of option plans as well as the size of the company and its need to offer incentives to employees to remain as employees of the company. Options may be awarded as an inducement to lure an executive to a company.
Options are also an effective tool to provide incentives to an employee to stay with a company, especially in the competitive high technology industry. Options granted during a term of employment may be a reward or bonus for work well-done (i.e., for past services) or as “golden handcuffs” to keep an employee from accepting a lucrative offer elsewhere (i.e., for future services).
Once vested stock options have been classified as “marital” property, the court has discretion to determine the appropriate method for valuation and distribution. There are basically three approaches to valuation and division: (1) net present value, (2) deferred distribution, and (3) reserve jurisdiction.
The net present value approach results in immediate distribution to the nonemployee spouse. A lump sum that represents the net present value of the future benefit is determined and may be offset by the value of other property in the marital estate. If using this method, the trial court, guided by actuarial data, values the future benefit, considers a number of different factors, including certain risks, and accords a present value to the future benefit. The benefits associated with immediate distribution are compelling in those instances where the value of the stock options is minimal relative to the overall marital estate. The non-employee spouse exchanges future contingent post-dissolution enhancements for the benefits of immediate distribution, while the employee spouse reaps the benefit of potential enhancements that may occur post-dissolution. If the employee spouse foresees that the options may dramatically increase after the divorce, that spouse will want to “cash out” the non-employee spouse. The “Net Present Value” method serves the goal of finality and allows the parties to disentangle financially, providing some measure of closure. By immediately offsetting the value of the options with other marital property, the policy of judicial efficiency is served because the parties do not have to return to court at a later date. In circumstances where the marital estate is large enough to permit an offset with other marital property, the net present value method should be preferred.
One approach to assigning a value on stock options is to determine its intrinsic value, which is simply the market value of the stock, less the exercise cost of the option and any applicable financing costs. Courts and experts have also used more complicated mathematical formulae to determine a stock option’s present value. Two main types of models exist: econometric and theoretical. Econometric models, or empirical models, use “regression analysis of historical relationships among economic variables to estimate statistically the expected value of an economic variable,” in this case, the expected value of stock options.
The two most widely used econometric models to value stock options are the Shelton Model and the Kassouf Model. The Shelton model is especially useful for valuing stock options of closely held companies. Most models use a variable known as the volatility factor, which quantifies the historical fluctuations of the stock’s price. The Shelton model does not use this variable. The information needed to determine the volatility factor is often not available when dealing with options issued by closely-held companies. Use of the Shelton model in this situation eliminates the need for the costly analysis, or outright speculation, which would be necessary to compute a volatility factor for the stock of closely-held companies. Theoretical models, or statistical models, rather than being based on historical observation, “are forward looking and attempt to determine what the option should sell for in the market given the option terms and the underlying stock’s salient characteristics.”
These models are based on a number of assumptions, one essential assumption being “that the price of the underlying stock behaves in such a way that possible future prices can be accurately modeled by some probability distribution.” The other assumptions vary from model to model. The best known and most widely used, of the theoretical models is the Black-Scholes Model. Computer programs using the Black-Scholes Model are readily available. The Black Scholes Model accounts for the option price, the term of the option, the market value of the underlying security, a risk-free rate of return, and the underlying volatility of the stock option, in order to come up with a present value for the option. When using any of these approaches to value employee stock options, it is important to note that these models were generally designed to value marketable options. Usually, employee stock options are non-marketable, and a discount for lack of marketability should be utilized. Furthermore, valuation should not rely on use of only one model. Using at least two models will help to ensure that the valuation is relatively accurate. The practitioner should bear in mind that, if the circumstances do not warrant an immediate distribution because there are either insufficient assets to permit an offset or the present value is too difficult to ascertain, the trial court may use either the deferred distribution or reserve jurisdiction method.
Unlike the net present value method, the deferred distribution and reserve jurisdiction methods do not result in an immediate offset with other marital property. Under these approaches, the non-employee spouse will not receive any benefits until the benefits are actually paid to the employee spouse or the employee spouse becomes eligible to receive benefits. Under the deferred distribution method, the court pre-determines the percentage the non-employee spouse will be eligible to receive once the benefits are paid or the employee spouse is eligible to receive them. The percentage used is commonly based upon the “time rule” formula. The “time rule” formula was explicitly made applicable to the division of stock options in In re Marriage of Balanson.
One commentator has suggested that the time rule fraction should be as follows: Period of Employment During Marriage (numerator) Period of Employment From Hiring Until Vesting (denominator). No Colorado case has expressly determined whether the employee-spouse is required to exercise the options as soon as possible. Most stock options preclude the employee-spouse from transferring or assigning the option so that the trial court would not be able to simply order a division in kind. One solution under the deferred distribution method is to have the court require the employee spouse to make a payment in cash to the non-employee spouse, based upon the predetermined “time rule” formula, as soon as the options are exercisable, whether or not the employee chooses to retain the options. Another alternative is to order the employee spouse to exercise the options and then transfer the underlying stock or sale proceeds to the non-employee spouse. Each of these possible solutions involves potential future court involvement and issues of employer cooperation.
In Colorado, a court may also apply the “reserve jurisdiction” method of dividing stock options. Unlike the deferred distribution method, whereby the court predetermines the non-employee spouse’s share, the reserve jurisdiction approach is effectively a “wait and see” method. If the court reserves jurisdiction, the marital portion of the options may be divided and distributed at a later date when they are exercised.
In In re the Marriage of Chen, the Wisconsin Court of Appeals upheld the use of the “if and when” method. The case concerned stock options that had been granted during the marriage but were not exercisable until dates after the divorce. The options were not transferable or assignable and expired if employment terminated. The trial court found that no reasonably accurate value could be assigned to these stock options, and therefore an award of a fixed sum would not be practical. The court then held that the employee spouse could exercise the options “if and when” he desired, subject only to employer and SEC regulations. Upon sale of the underlying stock acquired via exercising the options, the employee-spouse was to pay the non-employee spouse one half of the net profit. If the stock thus acquired had not been sold within 18 months of the date of exercise, the non-employee spouse could elect to be paid using the stock price 18 months from the date of exercise, or she could choose to wait until the stock was finally sold. If no net profit was made, no additional monies were due either party.
The Maryland Court of Special Appeals, in Green v. Green, approved a similar method of division. Just as in Chen, the employee spouse’s stock options were not assignable and could not be sold. The court found that “although it is true that an unassignable, unsalable option has no fair market value, it is nonetheless an economic resource, comparable to pension benefits, to which a value can be attributed.” The court approved an “if, as, and when” approach to the valuation and equitable allocation of the unexercised options, which applied to both matured and immature options. The trial court was to calculate a value of the options as of the date of the divorce decree. The court could then determine a percentage by which the profits should be divided if, as, and when the options are exercised. The court felt this was equitable as the employee spouse is under no compulsion to exercise his options. At the same time, however, the non-employee spouse’s equitable interest in the options, if exercised, is protected.
In contrast to the Colorado appellate courts, the Illinois Court of Appeals in In Re Marriage of Moody, found that stock options do not constitute property until exercised. It directed the trial court to retain jurisdiction until such time as the options were exercised or expired. If and when the options were exercised, the trial court was permitted to use its discretion in allocating an appropriate share of any profit realized by the employee spouse. This “if and when” approach subsequently withstood an argument that the court should have retained jurisdiction to permit the non-employee spouse to compel the exercise of her share of the options.
In Smith v. Smith, the Missouri Court of appeals upheld a trial court decree finding that the employee spouse had the right to decide whether or not to exercise his stock options. However, if the employee-spouse elected to exercise any of the options, he was to give the non-employee spouse 30 days notice before acting. During those 30 days, the non-employee spouse could provide the employee spouse with the cash necessary to buy a one-half interest in that option on her behalf. If she did not provide him with the cash, she forfeited her right to the one-half of that option. Each party was to pay a share of the income taxes on the options.
The “property” right at issue with regard to stock options is the right to choose whether or not to purchase stock shares which are offered at certain dates at specified prices. To divide this marital asset properly requires giving each spouse the right to choose whether or not to exercise the right to purchase the underlying stock. Because employee stock options are typically not assignable, and because division in kind is therefore not permissible, courts have developed alternative mechanisms to accomplish division. The “net present value” method of dividing stock options is the preferable method where the stock and the options are readily capable of valuation. In situations where the options are not capable of valuation, the deferred distribution or reserve jurisdiction methods more equitably serve to divide the options. Reserving jurisdiction to divide the options should be the last resort, since the goal of finality is contravened when parties will inevitably need to return to court to value and divide the options. Under most circumstances, the time-rule formula can pre-determine the non-employee spouse’s share when options become exercisable and therefore is preferable to reserving jurisdiction.
B. How to Value and Divide Retirement Plans
Deferred compensation refers to pension plans, 401K plans, IRAs and other retirement assets. Such plans are divisible as part of a property settlement in divorce regardless of which party is named on the plan. How they are divided depends on the value and nature of the asset. Perhaps one of the worst scenarios in a divorce is when these types of assets are transferred to a former spouse but the original owner is liable for liable for the taxes, including penalties for early withdrawal.
There are three main kinds of deferred compensation plans: Savings plans, such as IRAs, 401(k) Plans, ESOPs, Thrift Savings Plans; “Defined Contribution” plans; and “Defined Benefit” plans. With a defined benefit plan, an employee is provided a monthly payment starting at retirement age and ending at the end of his/her lifetime. A defined contribution plan is one in which the value of the plan is determined in part by the amount of contributions made into the plan. The money contributed may be invested and grow.
Savings plans such as an IRA are considered “cash” plans since they may be liquidated before a person retires. They are divisible as part of a divorce. However, before any division may occur, a custodian of the account must receive and review a certified copy of the court order dividing the plan. Additionally, the spouse receiving a portion of the plan must fill out documents relating to the manner of payout. IRA proceeds may be cashed out and paid directly to the receiving spouse or they may be “rolled” over into a new IRA in the name of the receiving spouse. However, the tax consequences related to cashing out the plan may reduce the plan proceeds by more than thirty percent (30%) for taxes and early withdrawal penalties.
The valuation of a defined contribution plan can be determined by multiplying the account balance by the percentage of vesting. This is a relatively simple way to value the plan and determine marital value. Generally, such plans may be divided currently with each party receiving one half of the current vested value.
With a Defined Benefit Plan, generally the participant’s benefits cannot be liquidated prior to retirement age and the non-participant spouse may receive a retirement plan in her name representing her marital interest in the participant’s plan. This plan is generally subject to the same terms and conditions of the original plan. Often, the Participant may choose a payment method from several options. The chosen method will affect the amount or timing of the payments to both the participant and any receiving spouse. This may mean that benefits are received when the original participant decides to retire, not when the recipient spouse retires.
A defined Benefit plan may be divided in one of two ways, Cashing Out/Present Value Calculation or Division of Future Benefit. For Cashing Out/Present Value Calculation, first, a recipient spouse may elect to receive money effectively cashing out his/her interest in the plan. To cash out, a present value of the plan proceeds must be determine. “Present Value” is the current value of a future benefit. In simple terms, a dollar that you receive today is more valuable than a dollar you receive next week since you may invest the dollar or deposit the dollar and accrue interest. Therefore, benefits that are received at retirement age would have a lower value if paid in a lump sum currently. Often, a calculation or of present value requires an actuary or accountant. For Division of Future Benefit, rather than using a present-day cash value, a defined benefit plan may be divided by dividing the future stream of income. This is accomplished by drafting a Qualified Domestic Relations Order (QDRO). This is a court order which instructs a pension plan to pay an Alternate Payee (or former spouse) a portion of benefits accrued by a Participant due to an equitable distribution agreement in a divorce. With this method, the court retains jurisdiction until the benefits are paid.
C. Valuing Executive Compensation Plans
The most common type of non-wage compensation is stock options in shares of the employer company. Occasionally they can even be for shares of a different, related company. There are 2 primary types of stock options, Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NQs). You won’t see ISOs much anymore as some changes in taxation to employers have made them less advantageous for employers but there are still some old ones out there. The difference between the two is in tax treatment and transferability. Stock options give an employee the right, not the obligation, to buy stock at a discount at some date in the future and are usually subject to some sort of vesting schedule. Where it gets tricky is if the options are partially vested at the time of divorce but can’t be touched for 4 more years. Well, obviously some of the intrinsic value belongs to the spouse but how much? The calculations are ugly and trust me, you just want to bring in a certified divorce financial analyst, CDFATM, or other expert to have it done right.
Restricted stock is shares of company stock given to an employee as either compensation for past performance or an incentive for future performance. It’s critical to get the actual grant documents to know which the case is for your client. It makes a big difference when determining how many of the shares are marital property. They can be in two forms, either actual shares of stock (RSAs), or a right to acquire shares at vesting (RSUs). Restricted stock has less risk than options and is rarely worthless. Again, depending on award dates, vesting schedules, dates of marriage and separation, the marital portion can be quite complex to calculate. This is another job for that CDFA.
Employee Stock Purchase Plan is a benefit wherein the employee is allowed to buy company stock at some regular frequency, usually at a price that is discounted from the current market price. When the shares are purchased, they can be sold immediately or held at least a year for more favorable tax treatment.
With a deferred Compensation Plan option, the employee can choose to defer some portion of current compensation until a future date. These deferrals may be salary, bonus or even equity compensation. Sometimes the employer will match these deferrals also. They are totally discretionary so any spousal maintenance should be based on total compensation before any deferrals. Any balances in the plan are likely marital property as well and should be analyzed carefully. Most plans are distributable at retirement but some plans allow distributions during employment as well. These plans can also be both qualified, pretax contributions or non-qualified.
D. Trust Assets
A trust is an agreement that is held by one person (trustee -person who manages the trust) at the request of another (settler -a person who creates and usually provides the funding for the trust) for the benefit of a third party (beneficiary – the person that receives the income or principal from the trust). Estate planning is accomplished in two ways: a (1) revocable trust; or (2) Irrevocable trust. A person can establish value of trust assets either way.
When a settler creates a revocable trust, this person has an option to modify this trust at some time in the future. Furthermore, this person can exercise his/her option to remove property and terminate the trust. On the other hand, when a settler creates an irrevocable trust, the settler cannot retrieve the property. The rationale being that the property belongs to the trust and not the settler.
In order to determine whether the beneficiary’s interest in the trust is marital property depends on the jurisdiction and the terms of the trust. When a trust is litigated or questioned, as a marital property, the following questions are generally considered:
1. Is the trust revocable or irrevocable?
2. Who (if anyone) is vested the power of appointment?
3. Who are the beneficiaries of the trust?
4. How and to whom does the trust provide for distributions?
5. Is the trust a discretionary trust?
6. Is the trust a support trust?
7. Is the trust a non-discretionary trust?
8. Does the trust provide for both non-discretionary and discretionary distributions?
In terms of jurisdictional differences, some states, including Oregon, have a broad view on whether a beneficiary’s interests constitutes property no matter whether such an interest is possessory, vested or contingent. Other states require that a spouse have a present right to receive the trust assets for a spouse’s interests to be considered acquired property. Meanwhile, other states have adopted a more flexible approach based upon an examination of the type of interest held by the beneficiary spouse in the trust.
An income interest in a trust is a provision which grants the beneficiary the right to receive periodic payments during the lifetime of the trust. Income earned from trusts are generally not considered property because these income earned via trusts cannot be assigned (one to whom property rights are transferred by another) or conveyed to another person.
In Missouri, an equitable division state, non-marital property could be considered martial. RSMo § 452.330.1 defines marital property as all property acquired by either spouse during marriage except:
(1) Property acquired by gift, bequest, devise, or descent;
(2) Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;
(3) Property acquired by a spouse after a decree of legal separation;
(4) Property excluded by valid written agreement of the parties; and
(5) The increase in value of property acquired prior to the marriage or pursuant to subdivisions (1) to (4) of this subdivision, unless marital assets including labor, have contributed to such increases and then only to the extent of such contributions.
In this vein, a spouse could argue in many states (if a state statute allows it) the other spouse’s income earned on separate property as marital property. For example:
[C]onsider client whose revocable trust provides that upon client’s death all assets will be distributed outright to client’s children in equal shares. If each child receives $100,000, then that $100,000 is non-marital property as property acquired by bequest. If child invests the $100,000 in stock that pays a $1,000 dividend, the $1,000 is marital property. If child purchases a home with $100,000 and child’s spouse spends weekends fixing it up to be resold, then the appreciation in the value of the home may be marital property as marital labor contributed to the increase.
There are many cases out there in various jurisdictions that are helpful on this topic. For example, in Holte v. Holte, during the marriage, husband’s parents established an irrevocable trust and assigned to it mineral rights with a one quarter interest to him. After filing for divorce, the trial court eventually granted his wife a one-half future interest in his trust income. Husband appealed and the North Dakota Supreme Court ultimately upheld the trial court’s decision, agreeing that a present valuation of the trust income was too speculative to value. Generally, marital property is valued as of the date of trial, rather than the date of distribution. However, in certain circumstances, a property’s value at trial may be too speculative to determine. Although at trial the husband had a fixed one-fourth interest in “all royalties and other income” from the trust, the value of his interest, which is based on mineral production levels, mineral values, and other factors, will fluctuate.
In another example, Byrd v. Byrd, the wife appealed the trial court’s decision in classifying her husband’s one-third interest in the trust as his separate property. The Mississippi Supreme Court affirmed, concluding that the husband’s one-third interest is his separate property. The court defined “marital assets” as assets accumulated or acquired during marriage, excluding assets attributable to one party’s separate estate prior to or outside marriage. Although proceeds from the trust might have been used to purchase assets, which became marital property, at no time did any assets, proceeds, or money go into the trust from the marriage.
In regards to a revocable trust, if a child takes $10,000, which was received from client’s revocable trust and puts it in a brokerage account containing money earned during marriage, then the inheritance has “commingled with marital property. In order to avoid such problems, a lawyer should be cautious when drafting mandatory or discretionary interests in a trust.
There are also many other notable decisions relative to this topic from various
jurisdictions. For example, in Solomon v. Solomon, the Pennsylvania Supreme Court held that only an increase in value in property actually acquired can be deemed marital property. In these instances, appreciation is to be calculated only to the degree to which the property exceeded its value the time of acquisition. However, if a beneficiary’s interest does not rise to the level of a property interest in the first place, there can be no argument that the asset is subject to division in a divorce or that the appreciation is martial property.
Likewise, other states also seem to focus on whether a beneficiary spouse has a present and absolute right to receive the trust assets. For example, in Mey v. Mey, the New Jersey Supreme Court held that a beneficiary spouse’s interest in a trust does not constitute property that is legally and beneficially acquired, unless the beneficiary has acquired “unimpaired control and totally free use and enjoyment” of the trust assets.
In Friebel v. Friebel, the Wisconsin Court of Appeals on a similar note held that a beneficiary spouse does not acquire an interest in a trust during the marriage, unless she has a right to receive the corpus of the trust. Similarly, in Lipsey v. Lipsey, the Texas Court of Appeals held that a beneficiary spouse does not acquire an asset unless she has a right to compel distributions.
In Missouri, the law distinguishes between mandatory and discretionary trust. According to this statute:
A beneficiary’s interest in a trust that is subject to the trustee’s discretion does not constitute an interest in property even if the discretion is expressed in the form of a standard of distribution or the beneficiary is then serving as a trustee or co-trustee. A creditor or other claimant may not attach present or future distributions from such an interest or right, obtain an order from a court forcing the judicial sale of the interest or compelling the trustee to make distributions, or reach the interest or right by any other means even if the trustee has abused the trustee’s discretion.
Furthermore, this statute provides that if the interest in a trust does not constitute a mandatory distribution, then “a beneficiary’s interest in a trust is subject to the trustee’s discretion.” Given this definition, an income earned via beneficiary’s discretionary interest is not a property because this earned income is “acquired by gift or bequest.” In sum, “if all distributions are subject to the trustee’s discretion, then neither accumulated nor distributed income will be marital property.” However, any future income earned on the beneficiary’s assets will be marital. For example:
Consider the client whose revocable trust provides that upon client’s death all assets are left in trust for client’s child, and the trust is funded with $100,000. The terms of the trust provide that the trustee may distribute the income and principal to child for health, maintenance and education, for child’s entire lifetime. If the trustee invests the $100,000 in stock that pays a $1,000 dividend, the $1,000 is non-marital property, notwithstanding whether the $1,000 is retained in the trust or distributed outright to child. “Health, maintenance, and education” is a discretionary standard, so the beneficiary has no property interest for divorce purposes. If the trustee distributes the $1,000 to the children outright, then the $1,000 is non-marital property, as property acquired by gift or bequest. However, if child invests the $1,000 in a bank account that earns $50 of interest, then the $50 will be marital property.
On the other hand, §456.5-506 defines mandatory distributions as:
a distribution of income or principal which the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. The term does not include a distribution subject to the exercise of the trustee’s discretion even if (1) the discretion is expressed in the form of a standard of distribution, or (2) the terms of the trust authorizing a distribution couple language of discretion with language of direction.
Unlike a trustee’s discretionary distribution, in Missouri, mandatory distributions are not treated in a similar fashion. There are two cases that concern with the mandatory distribution trusts: (1) Charles Moore v. Melanie Moore; and (2) Linda Moore v. Jaclyn Moore. In Charles Moore, the issue presented to the Missouri Court of Appeals was whether the income not distributed by the trust categorized as a marital property. The Court held that this undistributed income was martial property. The Court said,
“[H]usband had the right to terminate his trust when he attained age 35. This court holds husband constructively received the trust assets at that time. The trial court erred in not classifying the income the trust generated from that date until the date of the dissolution of the parties’ marriage as marital property.”
Furthermore, the Court concluded that any income received from non-marital property, after marriage, is considered marital property in Missouri. This analysis was adopted by other jurisdictions (Pennsylvania and Texas) and persuaded Missouri Court of appeals to utilize similar rationale when deciding whether property is marital or non-marital.
In Linda Moore, the Western District Court of Appeals held that “trust income which wife received as a result of corporation paying excess distributions to trusts was marital property.” The court treated this income as income earned on non-marital property. Furthermore, the court said,
“Trust income which wife received as a result of corporation paying excess distributions to trusts was marital property; wife, as sole trustee and sole beneficiary of each trust, held both equitable and legal title, excess distributions paid to each trust were in turn paid by wife, as trustee, to herself as beneficiary, wife reported the income on her tax returns, wife’s receipt of the excess distributions payable from the trust was actual rather than constructive, and trust agreements established that her right to the income from the distributions was vested, absolute, and irrevocable.”
Other states seem to focus as well whether a trust is discretionary or non-discretionary. For example, in In Re Marriage of Balanson, the beneficiary of the remainder interest subject only to her survival. In other words, she would receive the trust assets provided she did not die before her father. In this case, the Colorado Supreme Court held that the beneficiary spouse’s interest in a trust does not need to be subject to her present enjoyment to constitute marital property provided that the beneficiary had an enforceable contractual right to receive the trust assets in the future. The court concluded that remainder interests are distinguishable from discretionary trusts in that: “The value of such interests may be uncertain at the time of dissolution of marriage, they nonetheless constitute property because they are certain, fixed interests subject only to the condition of survivorship.”
In the Massachusetts Supreme Court, a similar decision was reached in the case of Lauricella v. Lauricella. In Lauricella, the beneficiary spouse had an interest in a trust subject to divestment only if husband did not survive until the trust terminated according to its terms. Given husband’s young age, the court concluded that the “likelihood is he will survive to receive his share…” Thus, the Massachusetts Supreme Court concluded that the fact that the valuation might be difficult, husband’s interest was a divisible asset. However, in a later case, D.L. v. G.L., the Massachusetts Supreme Court engaged in further analysis on this topic indicating that trust documents should be examined closely in cases to determine “whether a party’s interest is too remote or speculative to be so included.”
E. Interests in Closely Held Businesses
If there are closely-held businesses, professional practices and/or licenses’ the process can be especially difficult. For many divorcing couples, a closely held business is often one of the largest marital assets. The situation is often complicated by the fact that, as a privately held entity, there is no readily available market pricing for the shares. Using a qualified valuation expert to appraise the business is often the only way to get an accurate value for the asset. While the process may sound straightforward – choose a valuation date, appraise the business as of that date, settle the case, or go to trial -the determination of the valuation date isn’t typically a straightforward exercise and differs from state to state. As a result, the valuation process can be quite complex.
Since in many divorces the closely held business ownership interest is one of the major assets of the marital estate it is also an area where divorcing parties strongly disagree. The main issues that typically are disputed revolve around not only the value of the business interest, but the amount the non-owner spouse should receive as part of the either the overall settlement or trial judgment.
Usually, the business-owner spouse works in the business and performs certain executive, administrative and operational duties. It is common practice that the owner spouse does not want the non-owner spouse to have an equity interest in the business post-divorce. As a result, the owner spouse “purchases” the equity interest of the non-owner spouse in the course of negotiations in dividing all of the assets in the marital estate. The function of a business valuation expert is to determine the value of the business for this purpose.
In practice, business valuation is known more as an art than an exact science. While the theory involved in the business valuation process is typically similar in non-divorce valuations, there are many unique nuances to performing valuations in a divorce engagement imposed by the governing jurisdiction of the divorce.
The business valuation process, for the most part, utilizes a standard known as “fair market value.” In simple terms, this concept is a method where a hypothetical “willing buyer” would pay a hypothetical “willing seller” in a “free and open market” where each person, both buyer and seller, is in possession of all material facts with neither forced to buy or sell. In summary, it is an economic transaction between interested individuals as result of negotiations with all known facts.
Business valuations for divorces are predominantly undertaken in the same manner as any other business valuation. In the context of a divorce, some but not all of the considerations can include:
- What is the appropriate valuation date?
- Is the business being valued as a “going concern” (that is, it will continue to operate into the future and not, for example, be liquidated)?
- What is the standard of value to be used (i.e., fair value, market value, asset value, or some other standard)?
- What impact do related party items have on the cash flow of the business for valuation purposes?
While the concept of fair market value is generally understood, it is not necessarily the standard of value to be applied in divorce. The process of divorce is governed by the state laws and statutes of the jurisdiction in which the divorce action takes place. In addition, unlike a fair market value valuation, there is no hypothetical seller or buyer, and generally, no sale of the business takes place. As a result, many states have adopted standards of value that differ significantly from the commonly known “Fair Market Value Approach.” Various states use standards of value such as fair value, investment value, value to holder or intrinsic value. What can be more confusing, especially for divorcing couples who already have high levels of emotion and anxiety, is that between states, these terms can have different meanings. Therefore, it is extremely important there is a clear understanding between the parties, attorneys, and valuation expert from the beginning as to the valuation process.
The process with most business valuations starts with an analysis of a number of elements that are recognized by the appraisal profession to be of particular relevance in valuing any privately held company. Many valuation professionals refer to Internal Revenue Ruling 59-60, which lists the following factors to be considered:
- Nature and history of the business
- General economic outlook and specific prospects for the industry
- Net worth and financial condition
- Earning capacity
- Dividend paying capacity
- Extent of goodwill, if any
- Size of the block of stock being valued, especially if it represents a majority or minority interest
- Whether the stock in question is voting or non-voting
- Stock prices of comparable public companies, if any
- Sale(s) of company stock at or near the valuation date
- Limitations or restrictions on the stock, such as on transfer, dividends, etc.
- Sale(s) of stock in comparable closely-held companies, if any (implied)
The above information is mostly supplied by the business-owner spouse directly from the business and is typically requested through a process called “discovery.” The discovery process can be described as when the parties in the divorce exchange information, at least as it relates to the valuation and support obligation, about their personal and business finances. A request for information can be sent to the business owner, non-business owner spouse, and/or through the respective attorneys.
There are three generally accepted approaches to value any asset, business, or business interest: (1) the asset approach; (2) the income approach; and (3) the market approach. There are then different methods the valuation expert may consider within each of these approaches. Each approach has inherent strengths and weaknesses and some provide a more reliable conclusion of value depending upon the individual circumstances of each case. Generally, the valuation expert should consider all three approaches; however, it is often that all three approaches cannot be applied.
The basic premise of valuation is that when an individual makes the decision to acquire or invest in a business of any kind, there is an expectation of a return on that investment. The return on investment can be measured several ways, including future earnings or using some level of cash flows. A main factor in determining the value of a business and return on investment is operating performance.
In valuation engagements, the valuation expert will render a conclusion of value for a specific amount. However, in the context of divorce, it is not uncommon to see a valuation expert provide a preliminary range of values prior to the issuance of a formal report for two reasons:
· It may be easier for divorcing spouses to agree on a range of values rather than on a specific dollar amount.
· An amount within the range of values can also be used as part of the process of negotiating a desired level of spousal support.
It is important to note that while the valuation expert is an advocate for their opinion, they are not an advocate for either side in the litigation. The valuation process can take many hours for even an experienced expert to arrive at a conclusion of value. It is therefore fair to say the cost of performing a valuation and conducting all of the proper procedures can be very high, and is directly related to the cooperation from everyone involved.
To divorcing couples, the world of business valuation can be confusing, frustrating, costly, and overwhelming when faced with the entire process as well as life after divorce. However, with the help of a good attorney and experienced business valuation specialist, the divorce process can become less intimidating and become an opportunity for the divorcing spouses to become educated and involved in the process. Additionally, the valuation expert can provide their technical expertise to the attorneys in aiding them with respect to a valuation result that all sides can accept. While there may be a disagreement as to what is fair, the parties, their attorneys, and/or the court will have the information and knowledge to make an informed judgment on whether to settle or go to trial.
F. Valuations of Professional Practices (Medical, Dental, Accounting and Legal)
Few experiences in a valuation expert’s professional practice provide as much personal challenge and mental stimulation as being an expert witness in a court of law. During divorce proceedings, often the most challenging issue is the valuation of marital property for distribution. These types of valuations are especially difficult for the assets of a business or business interest. The term “professional practice” includes businesses in the fields of medicine, law, engineering, and other professional services.
When a professional gets divorced, the value of his or her practice or business interest is usually included as a marital asset for the purposes of property distribution. Additionally, the income generated from the practice is generally used to determine alimony and/or child support payments. Valuation experts understand that because of differing laws, states use widely varying standards to measure an asset’s value. The same follows for the recognition and measurement of the value of personal goodwill compared with practice or enterprise goodwill.
While the divorcing professional’s attorney has a responsibility to serve as an advocate, the valuation expert has no such responsibility. He or she must remain independent and objective during the valuation engagement. When the valuation expert is a CPA, he or she is also bound by the AICPA Code of Professional Conduct and the AICPA Statement on Standards for Valuation Services (SSVS1). Objectivity requires the CPA/valuation expert to be impartial, intellectually honest, disinterested, and free of any conflicts of interest.
Before beginning the engagement, the valuation expert must determine the appropriate standard of value that applies in the state or jurisdiction of the divorce. A family law attorney can inform the valuation expert of the appropriate standard of value to be used that reflects specific procedures in the particular state or jurisdiction. These standards include fair market value, fair value, investment value, and intrinsic value. Many states prefer fair market value but do not allow for the determination of goodwill. While these states want to follow the fair-market-value standard, they make no assumption that the business will be sold. This is not really fair market value.
Some states have begun requiring that business valuations be based on the intrinsic-value standard. SSVS1 says intrinsic value is “the value that an investor considers, on the basis of an evaluation of available facts, to be the ‘true’ or ‘real’ value that will become the market value when other investors reach the same conclusion.” In other words, intrinsic value is the value of the business or business interest to its current owner.
Besides identifying the applicable standard of value, the valuation expert must also fully understand how that particular jurisdiction mandates the standard. Reliance on an incorrect standard of value could lead to an incorrect conclusion-causing a court to exclude the valuation report and testimony from evidence-and possibly later form the basis of a malpractice lawsuit.
SSVS1 defines goodwill as an “intangible asset arising as a result of name, reputation, customer loyalty, location, products, and similar factors not separately identified.” Goodwill is generally separated into three categories: entity or practice goodwill, professional or personal goodwill, and goodwill that is transferable.
Practice goodwill is the value associated with the professional practice and is based on location, policies and procedures, staff retention, established patient/client base, and patient or client records. Practice goodwill is based on the assumption that clients or patients are likely to stay with the practice despite a change in ownership.
Personal professional goodwill assumes that the professional practice has a higher value because of the particular professional’s knowledge, experience, skill, and reputation. The implication is that if the practitioner were to leave to go to another practice, his or her clients would follow.
Transferable goodwill is personal as it relates to the individual, but, over a certain period, it can be transferred to another person. These types of assets include personal relationships or specialized knowledge that could be transferred through employee training or development. It also includes contact lists or client or patient relationships that are transferable. The assumption is that, over time, this goodwill will be transferred to new ownership and typically would be coupled with a covenant not to compete.
The valuation expert must distinguish professional goodwill, practice goodwill, and transferable goodwill from one another. While court decisions in a majority of states have supported the notion that the other types of goodwill are assets of the marital estate of a professional practitioner during a divorce, most states do not consider professional goodwill a marital asset. However, in some states, professional goodwill is a part of the marital property even if it is not transferable. There is no “one size fits all” or “magic formula” for determining the amount of professional goodwill versus practice or entity goodwill versus transferable goodwill. Unfortunately, because there is no objective way to determine personal goodwill, the valuation expert must rely on his or her professional judgment.
In addition to assessing the value of tangible assets owned by the professional practice, the assessment includes other intangible assets besides goodwill, such as patient or client lists, medical or client records, and covenants not to compete. Often, the intangible value of goodwill and covenants not to compete is greater than the value of the tangible assets.
State law determines the appropriate date on which to value the professional practice for divorce purposes. The valuation date may be the date the couple separates, the date the divorce action is filed, a date based on the trial date, or some other date. In addition, some states may determine the value of the practice included in the marital estate based on its value at the time of marriage and its value at the time of divorce.
Most divorce litigation disputes are settled outside the courtroom, but the emotional stress for the valuation expert stems from the apprehension that the valuation will end up in court. The valuation expert must be prepared to present complex financial and technical matters in a clear, logical, and concise manner. The consultant must be able to defend his or her conclusions and testimony under cross-examination by an often knowledgeable and usually hostile interrogator. In professional practice divorces, large gains and losses, both economic and personal, may result.
In professional practice divorce engagements, as well as other valuation engagements, there is no substitute for thorough homework and preparation. This includes understanding significant aspects of the case. It is vital to document supporting opinions and to be well-organized. Further, the expert must be able to communicate to the judge (or jury) the basis of his or her opinion and recall pertinent facts about the valuation engagement. These issues primarily relate to the use of appropriate standards of valuation, valuation methods, and discounts; presenting credible evidence; considering potential capital gain taxes; and classifying goodwill appropriately as either marital or separate property.
A successful valuation engagement in any divorce litigation requires sound judgment and well-documented conclusions. The valuation expert must be confident that the conclusions are objective, reasonable, and based on relevant facts and circumstances. In addition, the valuation expert must be confident that his or her conclusions are defensible in court. Many courts make their determination from previous decisions made in other states as well as their own. The successful valuation expert must have practical knowledge of relevant case law. This insight is likely to enhance the value of his or her services to referring attorneys.
G. Reading Business Evaluations
It is not uncommon for one or both spouses to own a part of some type of business. And, when it comes to a divorce, that ownership interest might be “property” that the court has to include in a property distribution, the division of the parties’ property, and so it becomes necessary to place a value on the business.
Courts generally have wide authority to decide what is equitable (or fair) when dividing property, and in most states, only marital property will be divided.
The valuation of a business involves numerous factors, such as what the business owns and what it owes, the business’ income, what formula or method should be used to determine value, and the valuation date. A business valuation is usually a very complex process, and more likely than not, it will require the use of experts, appraisers, and people who are experienced in business operations.
There can’t be a valuation of any business without knowing what it owns, which includes both tangible property, like inventory, office equipment, and manufacturing machinery, and intangible property, like patents, trademarks, and goodwill or good customer relations. It’s possible that some of these assets are marital assets and so they have to be included in the property distribution regardless of any division of the value of the business as a whole. For example, if one spouse owns a patent before the marriage, and after the marriage he or she starts a company that sells the patented-product, some states require that the patent be awarded to the owner-spouse in the property distribution, while other states might require that the couple share in its value. Nonetheless, independent of how the patent is divided or distributed, the patent will be considered in valuing the company for purposes of dividing the company between the parties.
Again, the distribution of property, including a business interest, is controlled by state laws, which vary greatly from state to state. So, be sure to read the laws in your area, or consult an experienced divorce attorney. What the business owes (“liabilities”) is just as important as what it owns (“assets”). Liabilities, generally, come in the form of money, goods or services that the business owes to others. So, a company’s value is sometimes viewed as the sum of the liabilities minus the sum value of the business assets.
Usually, the profitability of a business is a way of measuring its value. Profit is determined by subtracting the business’s expenses from its income. Expenses include the direct costs of producing the goods or performing the services that the business sells, as well as items like overhead – expenses that are necessary to keep the business running – such as rent and utilities. Income is the total amount of cash received from the sale of goods or services and other business-related activities, such as investment income or gain from the sale of business assets, like equipment. Because of the numerous ways in which “profit” can be calculated, and because businesses differ greatly on how “income” and “profit” are recorded in their books, you need to carefully read the business’s financial records and books so that the “profit” can be determined accurately.
There are several methods that can be used to value a business, but the two most commonly used are: the book value method and the earnings or market approach. The book value method is based on the values of the assets and liabilities as they are listed on the corporate books. The value of assets on the books is frequently the original cost of the asset, minus depreciation – the decrease in value that is caused by age or normal wear-and-tear, and adjusted for things such as an increase in value. The earnings or market approach is based on the market value or earning capacity of the business: what an outside buyer or investor would pay for the business, taking into account the future earning capacity of the business.
The purpose of any valuation of a business in a divorce or dissolution proceeding is to determine its fair market value so that a court can make a fair property division. Value on the date of the marriage is not very useful because it does not take into account that changing economic circumstances can make assets that had been valuable months or years earlier virtually worthless in the present, and vice versa. In addition, such a date does not account for increases in the business’s value during the marriage, which increased value, in itself, might be subject to the property division, depending upon the state’s property distribution laws.
H. Examining Forensic Experts/Business Valuation Specialists
Whenever a privately held business is among the assets in a dissolution proceeding, certain fundamental issues must be addressed in the context of determining the value of the business. If the business is relatively small in terms of the gross revenue it generates, the first issue is often whether the business is worth valuing. The cost of having a qualified professional value the business and produce a complete written evaluation report typically exceeds $10,000 at minimum. If after a cursory review of reliable financial information concerning the business there are questions about whether the business has significant value, a less comprehensive approach is likely warranted. For example, a business valuation expert can be engaged to provide an opinion about the range of value of a business without providing a full written valuation report. While engaging an expert for this limited purpose is generally not sufficient if the value of the business is going to be fully litigated, it can often be a prudent first step determining whether the business has a value significant enough to justify having a valuation report completed.
Choosing the engaged valuation expert is a critical decision. Professionals who represent themselves to be qualified to provide business valuation opinions often do not have the same credentials. The credentials and certifications of all candidates need to be examined. Information must be obtained concerning each potential expert’s experience, not simply in terms of their years of professional practice, but also with regard to the profession or industry in which the business to be valued operates.
An experienced valuation professional typically has a reputation in the community. There are many subjective decisions that a business valuation expert must make in the context of rendering an opinion as to the value of a business. Over time, certain experts tend to establish that they are more or less conservative in their approach to these decisions which has an impact on their conclusions of value. Where there is the possibility that the business valuation expert will be asked to testify, gathering information about the individual’s reputation for presenting his or her opinion in a clear, cogent and persuasive manner in a courtroom is important information to have when deciding who to choose.
The projected cost of the professional’s work and the time they need to complete the work are important considerations. Business valuation experts typically charge for their work based on set hourly rates. Particularly when a valuation firm is engaged where there are a number of professionals who might be involved in a project, identifying the individuals who will be doing the work and the billing rates of those individuals must be discerned.
The amount of time the professional needs to complete the project is a critical component of determining who to select. Typically, deadlines have been established either by the circumstances relating to a particular situation or by orders of the court making it fundamentally important to establish that the professional valuation expert can complete the work in a timely fashion within the established deadlines.
An individual involved in a divorce will seldom have the ability to decide who would be an appropriate choice to value the marital interest in a business. It is therefore prudent to seek guidance from a lawyer having knowledge in the substantive area of the law involved and experience in the community in order to make a wise decision. Clearly some of the information needing to be considered in choosing a valuation expert is only known to lawyers who have worked with, or against, the valuation experts who are among the field of candidates being considered.
I. Digital Assets
A digital asset can be anything from a social media account, to a blog, to an iTunes account. It can even include Bitcoin and digital storage. Does a Facebook page have a value? Does a series of YouTube teaching videos? What about domain names? Among the questions asked is whether the assets are owned, are they subject to division, and can they be valued. Because there is very little law on this subject, the courts may look to theories which are usually applied when allocating comparable ephemeral property.
Some of these “properties” can be divided using the models used when a court divides intellectual property. Others cannot be divided at all, but one spouse can buy-out the other, or the income stream can be divided with post-separation efforts factored into a decrease of the shared income stream over time. Many sites like Facebook prohibit their customers from transferring or allowing access to an individual’s page, but this should not bar a court from coming up with an equitable remedy to divide, allocate, or value these assets. The arguments of preemption in the fields of patents, copyrights, and trademarks have not prevented courts from dividing these assets in a divorce.
The rise in popularity of digital assets may outpace the ability of the court’s and the law to determine how to divide them. It is up to practitioners to identify these assets and start proposing practical and feasible solutions to bench officers so that all the marital property is properly valued and divided.
J. Insurance Issues
Property division is a key issue in most divorces, along with spousal support and child custody and support. Making a property inventory will likely be among your first tasks as you start your divorce. One possible type of property to be included in your property division may be a life insurance policy. There are several types of life insurance policies, and not every policy presents property division issues. The laws in your state can make a difference in how life insurance policies will be treated in your divorce. Finally, the facts in your case can matter when it comes to dividing interests in a policy.
There are basically two kinds of life insurance: term life and whole life. A term life policy insures against someone’s death for a set period, and ends. Contrast this to a whole life policy that has investment qualities, builds cash value, and generally won’t expire once the premiums are paid up. Term life insurance generally isn’t treated as marital or community property – there’s no surrender or loan value. A whole life policy with a cash surrender value can be treated as marital or community property.
Even if a life insurance policy isn’t an asset you need to include in your property division, make changes as needed. Changing your beneficiary may be important given the life change of your divorce. It’s a detail that is also easy to overlook, and you don’t want a current and former spouse left fighting over who is truly entitled to your policy’s proceeds. Terms of your separation or divorce decree may require one spouse to keep a policy in force and name the other spouse or a child as a beneficiary.
Most often it is a whole life insurance policy with a cash value that is at issue in the property division in a divorce. The “value” in a term life policy may be limited to the power to renew it for another term. Life insurance can be characterized as separate or marital property (in an equitable distribution state), or as separate or community property (in a community property state). Generally, a life insurance policy bought before marriage and paid for with separate funds remains separate property. Conversely, a policy purchased during marriage is entirely marital or community property if all premiums are paid with marital or community funds. Problems may come up when policy premiums were paid partly with separate and shared funds. These issues don’t come up too often, but several cases in community property states can give you an idea on how a court might treat an insurance policy dispute.
In the inception of title approach, the original character of a life insurance policy when it was issued controls. The source of later premium payments doesn’t matter. For example, your separate property policy you bought before marriage remains your separate property. You may have to repay premiums paid with marital or community funds, however.
The apportionment approach makes a pro rata split in a life insurance policy based on the source of funds used to pay the premiums. For example, there may be separate and community interests in a whole life policy you bought before marriage. While some premiums were paid with your separate funds, there’s a community property interest too, based on premiums paid after marriage and the policy’s appreciation in value during the marriage.
The annual theory applies to term life insurance policies. A term policy is viewed as a set of annual insurance contracts. Insurance proceeds are characterized based on the source for the last premium paid.
In re Marriage of Miller, 915 P.2d 1314, 1317 (Colo. 1996).
Thomas P. Malone, Employee Stock Options and Restricted Shares: Determining and Dividing the Marital Pot, 25 Colo. Law. 87, 90 (1996).
In re Marriage of Huston, 967 P.2d 181, 183 (Colo. App. 1998).
In re Marriage of Miller at 1319, n.9.
In re Marriage of Hunt, 909 P.2d 525 (Colo. 1995).
Shannon Pratt, Valuing a Business: the Analysis and Appraisal of Closely Held Companies 452 (2000).
Davidson v. Davidson, 254 Neb. 656, 578 N.W.2d 848 (1998); see also, Wendt v. Wendt, 1998 WL 161165 (Conn. Sup. Ct. 1997); Murray v. Murray, 128 Ohio.App.3d 662, 716 N.E.2d 288 (1999), citing, Chammah v. Chammah, 1997 WL 414404 (Conn. Sup. Ct. 1997).
In re Marriage of Hunt, 909 P.2d at 540.
In Re Marriage of Balanson, 03CA0765 (Colo. App. 2004).
In re Marriage of Balanson, 996 P. 2d 213, 220 (Colo. Ct. App. 1999).
In re the Marriage of Chen, 416 N.W.2d 661 (1987).
Green v. Green, 64 Md.App. 122, 494 A.2d 721 (1985).
In Re Marriage of Moody, 119 Ill.App.3d 1043, 75 Ill.Dec. 581, 457 N.E.2d 1023 (1983).
Smith v. Smith, 682 S.W.2d 834 (Mo. App. 1984).
Andrew Littman, Valuation and Division of Employee Stock Options in Divorce, Stevens, Littman, Biddison, Tharp & Weinberg, LLC, (March 10, 2015), http://www.slblaw.com/2015/03/10/valuation-and-division-of-employee-stock-options-in-divorce/.
Maury D. Beaulier, How Retirement Plans Are Handled In Divorce, Woman’s Divorce.com, http://www.womansdivorce.com/retirement.html/.
Nancy Hetrick, Divorce Settlements and Executive Compensation, Attorney at Law Magazine, (2013), http://www.attorneyatlawmagazine.com/phoenix/divorce-settlements-and-executive-compensation/.
Trust, Black’s Law Dictionary (10th ed. 2014).
Keith Herman. How to Protect Assets From a Beneficiary’s Divorce, B.A.M.S.L. 25th Annual Estate Planning Institute, (2014), available at http://www.greensfelder.com/media/event/90_HermanPresentation.pdf.
Jonathan W. Wolffe, The Treatment of Trusts in Divorce, 22 Am. J. Fam. Law 4 (Winter 2009).
§452.330.1 -Disposition of property, factors to be considered. 2012.
Holte v. Holte 837 N.W. 2d 894 (N.D. 2013).
Byrd v. Byrd, 100 So. 3d 443 (Miss. 2012).
Solomon v. Solomon, 611 A.2d.686 (Pa. 1992).
Mey v. Mey, 398 A.22d 88, 89 (N.J. 1979).
Freibel v. Freibel, 181 Wis.2d 285, 293 (Wis. App. 1993).
Lipsey v. Lipsey, 983 S.W.2d 345, 351 (Tex. Ct. App. 1998).
Charles Moore v. Melanie Moore, 111 S.W.3d 530 (2003).
Linda Moore v. Jaclyn Moore, 189 S.W.3d 627 (2006).
In Re Marriage of Balanson, 25 P.3d 28, 42 (Colo. 2001).
Lauricella v. Lauricella, 565 N.E.2d 439, 440 (Ma. 1991).
D.L. v. G.L., 811 N.E.2d 1013 (Mass. App. Ct. 2004).
Hubert Klein and Michael Yanoff, Valuation of a Closely Held Business in Divorce, EisnerAmper, (April 6, 2015), http://www.eisneramper.com/valuation-closely-held-business-divorce-0415.aspx/.
John Plageman, Divorce Litigation: How Much Is a Professional Practice Worth?, The Tax Adviser, (November 30, 2014), http://www.thetaxadviser.com/issues/2014/dec/tax-clinic-08.html/.
Lawyers.com, Valuing a Business in Divorce, http://family-law.lawyers.com/divorce/valuing-a-business-in-divorce.html/.
Mitchell Reichman, Business Valuation in Divorce: Choosing a Valuation Expert, Jaburg Wilk, Attorneys at Law, http://www.jaburgwilk.com/news-publications/business-valuation-in-divorce-choosing-a-valuation-expert/.
Jennifer M. Riemer, Dividing Digital Assets in Divorce, Walzer Melcher LLP (2015), http://www.walzermelcher.com/dividing-digital-assets-in-divorce/.
Family-law.lawyers.com, Life Insurance Benefits in Divorce (2015), http://family-law.lawyers.com/divorce/life-insurance-benefits-in-divorce.html/.