HOW ARE BUSINESSES VALUED IN HIGH ASSET/HIGH NET-WORTH DIVORCES IN FLORIDA?
Valuation dates are important in high asset/high net-worth divorces cases in Florida. In a case captioned Murphy v. Murphy, the Florida Court of Appeal recently addressed this issue. In Murphy v. Murphy the Husband appealed the Final Judgment of Dissolution of Marriage. The Wife cross-appealed the trial court’s Final Judgment.
The Husband and Wife were married in 2001. In 2003, the Husband opened an investment and retirement savings plan. The Husband contributed to the investment and retirement savings plan during the course of the parties’ marriage. After the Petition for Dissolution of Marriage was filed, the Husband continued to contribute to the investment and retirement savings plan. The trial court ruled that the investment and retirement savings plan was a marital asset. Accordingly, the lower court divided the plan equally between the parties. The Husband argued to the Florida Court of Appeal that his contributions to the investment and retirement savings plan after the filing of the Petition for Dissolution of Marriage was filed made this plan a nonmarital assets.
The Florida Court of Appeal agreed with Husband’s position and reversed the trial court. The Florida Court of Appeal stated that in high asset/high net-worth divorce cases, when the increase in the value of an asset was the result of one spouse’s individual efforts after the filing of the Petition for Dissolution of Marriage, that asset should be valued as of the date of the filing of the Petition for Dissolution of Marriage. For example, a business might be worth $90,000,000.00 at the time of the filing of the Petition for Dissolution of Marriage. Subsequent to the filing of the Petition for Dissolution of Marriage, the business might be worth $180,000,000.00. Under the Florida Court of Appeal analysis in Murphy v. Murphy, the asset will be valued for purposes of equitable distribution on the date of the filing of the Petition for Dissolution of Marriage.
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