When a business owner is getting a divorce, determining the value of the business interest to include in the marital estate can be one of the most contentious and time-consuming issues. Rather than hire separate experts to duke it out in court, many spouses opt to hire one joint appraisal expert.
If a divorce involves a business, consider hiring a joint appraiser. You may arrive at essentially the same value, spend less money, speed up the process, and reduce hostility.
Benefits for Both Spouses
Here are some of the key advantages of using one expert:
Cost. Both parties jointly pay the retainer and any incremental appraisal costs out of marital funds.
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.
Time. Joint valuators streamline the process and save time. Allowing one expert to visit the facilities and interview management also disrupts daily business operations less than granting access to two experts.
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. From a judge’s perspective, the use of joint appraisers eliminates the guesswork of deciding between two experts’ conclusions. 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
If you decide to go this route, make sure the appraiser has done joint appraisals before or is familiar with the process. 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.