Net Distributable Value (NDV)

It's important to understand that the raw value – however you obtain it – is probably not the same as the Net Distributable Value (NDV).

If there are no transaction fees, commissions, taxes, or expenses of sale that will eventually be owed upon the sale of the asset, and assuming that no paid preparation of documents is necessary to handle the asset, the Net Distributable Value would be the same as the raw value.

However, for almost all assets (U.S. currency and depreciated personal property or household goods would be among the limited examples of exceptions to that norm), one or more of those fees, taxes, loan balances, or other expenses would be subtracted from the value.

The NDV is what we use to standardize the comparison of assets.

For example, if you had $25,000 in cash, you would have something more valuable than someone who had a car that was worth $30,000 but had a $10,000 loan balance.

If you looked only at the raw value, the person who had the car – financed though it was – would have appeared to have the more valuable asset.

Similarly, a car loan balance of $10,000 at 7% interest is not as much of a financial burden as a credit card with a $10,000 balance at 22% interest.

The NDV is the way to dig beneath the surface to even out those factors to be able to compare one asset to another in a mediation negotiation.

Matthew is skilled at computing the NDV and applying it asset by asset and debt by debt.

In any divorce, you decide numerous issues, and many aspects of your lives that will be affected by the decisions you make in mediation. It is crucial to examine how each decision may affect other seemingly unrelated or less relevant things.

Anyone who is thoughtful about a divorce will aim to take a “big picture” view, but it will be limited by that person’s knowledge. If you don’t know that you should take something into account, you won’t. If you have chosen between the two options you know about, even though four or five are available, you cannot be sure that you have directed yourself to the best outcome.

That’s where your divorce professional can assist you most. In a divorce, the more your lawyer or mediator knows, the more options that that person can present to you. Because of Matthew’s extensive knowledge of divorce finance, he can help you with a broader view to consider more issues and options. He will also help you take a closer look at the nuances of each of your decisions. With the financial questions in a divorce, what seems like a subtle distinction or omission can cause a very different result.

When people say “we want to divide everything 50/50,” that’s usually a simplistic view. Often, the outcome they are envisioning is different, as it should be. Wanting an equitable division of marital assets is a fine and achievable goal, but usually not by each party taking half of each asset, one by one.

Matthew will aid you in understanding the potential short-term and long-term results of the options you may be considering. Considering what is known and anticipating the scenarios that are unpredictable will give you a foundation such that you will be able to adjust to future circumstances without your divorce decisions hinging on the one outcome you may believe is most likely to transpire.

The Big Picture: A Holistic View of Finances