Should discounts for lack of marketability and minority ownership be taken into account in seperate property valuation during divorce?

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Should discounts for lack of marketability and minority ownership be taken into account in seperate property valuation during divorce?

Stock in a family owned business was gifted to me and its value at gifted took into account lack of marketability and minority ownership discounts. I am now getting divorced. Should the current value of that stock, as used in the divorce settlement, be computed using the same discounts or should full market value prevail?

Asked on April 30, 2012 under Family Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

First, if you alone were gifted stock in a small family owned business, its mention as part of the community assets would be improper for division purposes since it is separate property not community property unless you gave some portion of it to your spouse.

Assuming the stock needs to be valued for maritial dissolution purposes, its current fair market value should be assessed taking into account lack of marketability and minority ownership discounts under generally accepted methods of accounting.


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