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Should I get a business appraisal during a divorce?

How to avoid a “Cage Fight”, in a divorce over physical property:

If you have a fair amount of assets, YES!   Often in a divorce, two parties are in dispute and the assets are the arena of the “Cage Fight”.

What determines “a fair amount of property in a divorce”?  Here are a few helpful brackets or levels.  These levels I choose arbitrarily based on the cost or fee to have the assets appraiser. After all, you don’t want the cost to our weigh the benefit.

Even a modest family with at least $50,000 of annual income, generally there are enough assets accumulated that splitting them is very argumentative.  In this case you should limit the scope of the asset appraisal to only the major items, i.e. home, car, and of course a business if that is a source of income.  Any items great significance to one or the other parties, such as a DVD collection, jewelry, etc, regardless of value, should be appraised.

The court will have some say so in the valuating and splitting of items, by the way.  But lawyers on each side will often make a stand or create a firestorm of “he saids and she saids”  One way to defuse this contention is a certified appraisal.

In the case of small business ownership, this is THE MOST CRITICAL ISSUE and it is MOST IMPORTANT that the appraisal be a Certified Business Valuation Appraisal.

The cost of a simple asset appraisal in the above $50,000 annual income anticipates about $10,000 or more in household goods and at least one car.  The fee could be under $200 if uncertified.  But that likely will be rejected or worse… argued by the lawyers and running up the huge and unnecessary legal fees and then still needing to buy the Certified Appraisal.  The fee for such a Certified Appraisal would be about $750.00.  If household goods are over $15,000 and it is newer car or more than one car, the fee would be about $1,200.00 Once the combined family income gets to $60,000 to $80,000, most likely the number and value of assets would be greater.  I rarely have quoted such an Appraisal for less that $1,500.00.  Generally these average $1,750.00 to $3,500.00 for most middle income families.  (HNW, High Net Worth families can run into the tens of thousands, of course.)

Now as to the Business Valuation, same rule applied, it MUST be a ‘Certified” Business Valuation.  An uncertified valuation could be less than a $1,000 and something over the Internet maybe just a few hundred. But neither will have ANY credulity or credibility.

Again, the lawyers on both sides will burn up many high dollar hours arguing and never agreeing.

The value of the Certified Business Valuation is that it is hard to argue.

When a Certified Appraiser such as myself certifies a Business valuation, it is hard to argue with it.  The lawyers can question, “Why did you say this or do that?” But at the end of the day, it generally stands and the Court appreciates it and cuts the lawyers short!

The costs of a Certified Business Valuation depends greatly on the complication of the business and how much time and expertise is required to collect the information, review and analyze the information and then begin the process of matching up “comps” and industry data and  then weighing all the factors and preparing the final Report.

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