The valuation concept of “double-dipping” refers to the double counting of marital assets; once in the property division and again in the support award. This theory is premised upon the fact that the same cash flows capitalized to determine the value of a spouse’s business (an asset subject to equitable distribution) are also considered a component of that spouse’s total income for support calculation purposes.
In the context of divorce proceedings, where the Court uses a business owner’s “excess earnings” to value the business, and also fixes support based upon that spouse’s total income (inclusive of the “excess earnings” used to value the business), a “double-dip” can occur. In order to fully understand the “double-dip” issue, an understanding of basic business valuation theory and methodology is required. Contact us if you have any questions or require assistance with a matrimonial valuation issue.