When you’re going through a divorce, you may be dividing a variety of different assets. Each will need to be properly valued to come to a final settlement. Specific assets may be valued differently. Here’s some information on the valuing of specific assets during divorce.
If you or your spouse do not wish to sell the home and are negotiating an agreement out of court, you can use whatever value determination you both agree is fair. This can be fair market value, original purchase price, or the amount it would take to pay off the mortgage. In court, the judge will likely use current real estate appraisals of the property to determine value. A real estate appraiser will be used as the expert to determine the value, and each party can hire their own appraiser if they wish. Because there are various approaches that appraisers might use to determine value, you’ll want to have an appraiser on your side if you’re arguing your case before a judge.
There are various ways that an expert might value a business. These approaches are the asset approach, the income approach, and the market approach. You’ll want to hire a business evaluator who is familiar with each of these approaches and has plenty of experience to avoid common errors in business valuation. The expert will review financial statements such as tax records, balance sheets, and profit and loss statements, as well as review the industry in which the business operates to determine the overall health of the business. Because it is common for the value of a specific business to vary between experts, it is important to have your own business evaluator on hand during the settlement.
You may not care much about your spouse’s antique toy car collection, but you might want to. In divorce, things like an antique car collection can become valuable assets, and you may be entitled to a portion of the value of this collection. Make sure that your team of experts includes an appraiser skilled in determining the value of any art, antiques, or collectible items.
During the divorce settlement, you’ll need to determine the fair market value of the marital vehicles. This will mean using either Kelly Blue Book or Edmonds, which are guides used by the automotive industry. You can also visit auto dealers and ask what they would pay to purchase your vehicle or what the trade-in value would be. If you have teenage children who are driving, you’ll want to agree on whether or not to include their primary vehicle in the community property settlement or to keep it separate from the division of assets.
A Certified Divorce Financial Analyst can help you figure out which experts you’ll need on hand for valuing specific assets in divorce. An attorney alone might not be properly equipped to help you protect your financial interests. As you can see, valuing assets is a complex process.
For more, see our Certified Divorce Financial Analyst Services