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One of the problems that you sometimes run into when you’re dividing assets is working with an information deficit, meaning you have a client that comes to you who knows nothing about the family’s finances. That is very different than when you are representing the party who knows everything about the finances. So you are in a situation where you’re going to have to conduct what we call discovery. That’s just the process where we’re gathering information voluntarily, involuntarily, so that we have enough information to advise our client on what something is worth, what the issues are in the case. And then once you gather that information, you often then run into issues of valuation. They may have a home that nobody can agree what it’s worth. Do we need to get an appraiser? Are we satisfied with the real estate agent’s opinion?
Certainly, if you have a closely held business that comes with its own set of issues, you certainly have to consider any tax implications. We like to tax affect the balance sheet. Another obstacle we sometimes run into would be sort of structural impediments. Like, for instance, the parties are largely illiquid. Maybe they own a business, maybe they have a home, but that’s where they put all their money. They don’t have retirement assets, or they don’t have cash or securities because they put all their money into their business or their home. Well, how are we going to divide that? It depends on who’s going to keep what.
And if you have a scenario where one party is keeping one asset and one party is keeping the other, and those values don’t equalize, well, then you’ve got to figure out how you’re going to make the other party whole. And that could be done by cash payments over time or some other creative financing. Or you might find yourself in a situation where if a judge, for instance, gets presented with that dilemma, he or she may just order that the assets are sold, which is a risk that any party runs if they can’t settle their case and have the judge decide.