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Divorce is never easy. If your divorce involves a business, it's even more complex. We've worked with many attorneys and business owners to provide appraisals for divorces, some more amiable than others. One thing that all of these situations have in common is that by the time our appraisal firm is called in, the divorce process has usually been going on for some time. Our goal in the process is to help finalize the situation so that the parties involved can move on with their lives. We do our best to make the appraisal process as efficient and easy as we can.

We've written before about how a shared expert can simplify and streamline the appraisal process for divorce. Whether or not that's possible in your situation, here are a few things to keep in mind when a business is part of a divorce.

Plan Ahead

While we like to believe in the best of people, divorce can bring out the worst. So be prepared.

It can be sometimes be important to document equipment as soon as possible in the divorce process to avoid equipment being sold or moved before the inspection process. This is more likely to happen with business where one spouse is hands-on while the other is more off-site, perhaps not involved in running the business at all. In several cases we've been involved in, the inspection is the first time that the off-site spouse realizes that some of the most expensive equipment in the shop has been liquidated, with no good records of the transactions.

Often both spouses will want to be present during an inspection. And while that seems reasonable, we've experienced some extremely unpleasant situations during inspections, from verbal abuse to physical altercations. In one instance, an adult child of the divorcing couple had to physically remove one parent from the premises. In other cases, we've had to suspend the inspection until an attorney could arrive to keep the peace.

If there is any chance that such difficulties might erupt with both parties present, we suggest that counsel (either one or both) be present during the inspection; another trusted and respected person, such as a stalwart family friend that both parties can agree upon, could also serve here.

List Equipment for Valuation

Many problems throughout the appraisal process begin and end with what appraisers call the asset list, which is at its most basic a list of the equipment that needs to be valued. An equipment appraiser generally prefers to have at least a suggested asset list before accepting an assignment or scheduling an inspection. Inspections often uncover items that were not included on the original list and just as often discover that items on the list cannot be located.

Agreeing on the list of equipment to be appraised is a critical step in the divorce appraisal process. In the case of separate appraisers for each party, the list should be agreed upon before scheduling your equipment appraiser's inspection. It is often necessary, if the the inspection does not support the agreed upon list, to do another comparison and agreement before the appraisal research process begins. If at all possible, both appraisers should be working from the same general list of assets to avoid difficulties and delays in court.

Determine the Effective Date for Value

Decide with counsel whether the appraisal should include a retrospective value, the current market value, or both. A retrospective value could be the date of separation, the date that one spouse disengaged from involvement in the business, or another mutually agreed upon date. This article in Forbes discusses the complexities of the effective date of the valuation in some detail. State laws vary...

Prepare for Court

Whether of not you expect the divorce settlement to go to court, proceed as if it will. Hire an appraiser who understands the court system. Be sure that your appraiser is willing and able to serve as an expert witness if your divorce goes to court or arbitration. Your appraiser must also provide an equipment appraisal report that includes adequate research, data and explanations to support the opinion of value. A well researched and competently written report can sometimes deflect the need for an expert witness appearance and the fees that includes.

Expect Confidentiality

An equipment appraisal for divorce appraisal is confidential to the Client and Intended User. No information regarding the appraisal or appraised value will be shared by your appraiser unless required by law or subpoena.

Get Help

Whether you are an attorney or business owner, if you have questions regarding equipment appraisals for divorce or litigation, please call us at (530)795-5536 or contact us through this on-line form.

We are here to help.


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Jack Young, ASA, CPA is an Accredited Senior Appraiser (ASA) of the American Society of Appraisers specializing in Machinery and Equipment Appraisals and a Certified Public Accountant (CPA). Mr. Young has also been awarded a Master Personal Property Appraiser (MPPA) designation from the National Auctioneers Association. He has thousands of hours experience as an Equipment Appraiser and is an active member of the Northern California Chapter of the ASA, where he serves as Chapter President.

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