Determining the value of the business interest to include in the marital estate can be one of the most time-consuming and contentious issues when a business owner is getting a divorce. Rather than hire separate experts to argue it out in court, many spouses opt to hire one joint appraisal expert.
Benefits for Both Spouses
Here are some of the key advantages of using one joint expert:
Cost. Both parties jointly pay the retainer and any incremental appraisal costs out of marital funds.
Time. Joint valuators streamline the process and save time. Allowing one expert to visit the facilities and interview management also disrupts less of the daily business operations than granting access to two experts.
Objectivity. The parties openly share financial information and disclose all business assets and income. The appraiser has all the information he or she needs to make an informed appraisal conclusion.
Settlement. Issues are settled upfront and spelled out in the appraisal agreement.
If the parties can agree to be honest and unemotional, the likely result is a fair and reasonable valuation that is acceptable, although not usually entirely pleasing, to both parties.
Endorsed by Family Courts
Family law courts often prefer the use of joint appraisers, too. The use of joint appraisers eliminates the guesswork of deciding between two experts’ conclusions from a judge’s perspective. Streamlining the process makes more efficient use of the family court system. That’s why a few jurisdictions actually require joint appraisers in family law proceedings.
Selecting a Joint Appraiser
Make sure the appraiser has done joint appraisals before, or is familiar with the process if you decide to go this route. It’s important that the appraiser understands the nuances of objectively working for both parties so the appraisal isn’t contested or thrown out.
Business valuation in marital dissolution cases is highly state-specific. So it’s also important to hire a credentialed business valuator who’s familiar with the legal precedent in your jurisdiction. That way, you’re more likely to obtain an accurate appraisal that includes (and excludes) the appropriate components of value in your marital estate.
Contact Filler and Associates for more detailed information about hiring a joint appraiser.