Divorce Appraisal of Business Assets
Divorce Appraisal of Business Assets is imperative to avoid much litigation. Divorce creates many problems, one of which is the division of assets. When business is involved, it can become even further complicated, which is why a divorce appraisal of the business should conducted during divorce proceedings. Even if the business is held in the name of a single spouse, if the business was purchased, financed or improved upon during the marital period, both parties are entitled to an equitable division.
It is not unusual for only one spouse to be actively involved in the business, which is why a divorce appraisal is necessary. Whether purposely or not, that partner will usually underestimate the value of the business. If the inactive business spouse fails to ensure that a divorce appraisal is undertaken, they may find in the future that they have not received a fair distribution of the marital assets. It is likely to cost you more financially to forego a divorce appraisal, rather than paying the upfront cost of a divorce appraisal to be conducted during divorce proceedings.
Cases over the years, where one spouse has taken the word of their partner about the estimation of a business, and failed to instigate a divorce appraisal, clearly demonstrate the risk you take in failing to ensure a divorce appraisal is undertaken.
A prime example is a case where the husband informs the wife that the business is worth 2 million. Wanting to get divorce proceedings over quickly, the wife agrees to a division of assets based upon the figure indicated by her husband. Once the divorce was finalized, the business was then sold for 12 million, far more than the estimate originally given to the wife.
Had a divorce appraisal be conducted, this situation would not have occurred. And though a lawsuit can be brought against the ex-husband, it is unlikely to be successful when no divorce appraisal was undertaken during divorce proceedings.
To ensure that you don’t end up in the same situation, it is important that should you be undergoing a divorce, you seek a divorce appraisal to ensure that all assets are valued and distributed fairly. While you might believe that you are saving money by foregoing a divorce appraisal, it is likely that you will actually be losing money.
An accredited divorce appraiser will provide you with a detailed analysis and reports, which is important even during civil divorce proceedings. It is also possible to choose a joint appraiser, so that both parties are able to split the cost of the appraisal. In either case you will need an expert appraisal witness to give irrefutable testimony should the appraisal need to be defended.
Accredited appraisers will follow the USPAP 2011 rules and regulations when conducting a divorce appraisal, so even if two different appraisers were to conduct an evaluation of the same assets, the values they arrive at may not be exactly the same, but should be fairly close.
Whether it’s a corner store, or a multi-million dollar business involved, a divorce appraisal should always be conducted once divorce proceedings begin, to ensure equitable distribution occurs.
Durkin Valuations Associates Has:
- Seven Senior Professional Appraisers Nationwide
- 70 years combined valuation experience
- Acreditations; ASA, NAPA, GPPA
- USPAP 2011 - 2012 Cpmpliant
- Qualified as EXPERT APPRAISAL WITNESSES
Give us a call at (617) 720-0332.
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