Valuation in divorce situations
The valuation of an enterprise that is involved in the settlement in a divorce situation requires special care, considering the large conflict of interests. Value Drivers Business Valuators frequently functions as an advisor when determining the value of an enterprise in the context of a divorce. The valuation assignments are frequently executed in collaboration with (divorce) lawyers and (divorce) mediators.
A divorce process is often a difficult period with which people like to get over with swiftly. In order to unwind properly, it is required to conduct a financial unwinding as well, the so-called settlement and distribution of the property wealth and estate. This includes among others an own house, the household effects, savings accounts, pensions, but also the enterprise of (one of) the partners.
Valuation of an enterprise for the benefit of the estate distribution
As a principle, all properties and debts including the value of the enterprise are to be equally distributed among both (ex) partners who are in divorce, assuming that marriage has taken place under community of property. This can also prevail in case of registered partnership without conditions. Additionally, the conditions under which the marriage took place can include that the enterprise should be distributed equally in case of divorce.
An independent Register Valuator
In such cases, the enterprise will be distributed to the entrepreneur in the statement of assets that will remain existent after the divorce. It is important that the valuation of the enterprise is executed on an independent and objective basis. A register valuator is the eminent specialist in this case. Additionally, a register valuator can function as a party expert, in case both parties prefer to hire separate experts. Moreover, an adequately supported valuation is of crucial importance for a potential court procedure.
The calculated economic value of the enterprise is to be taken into account in the statement of assets of the property distribution. In case the value of an enterprise represents the majority of the value of the property, the partner who will continue the enterprise has to make financial arrangements for this. This can take place through a credit agreement between both (ex) partners, but considering all emotions, it might occur that this is not realistic. In this case, the partner who will continue the enterprise is to raise funding in order to allow for the financial unwinding to take place. Also in this case Value Drivers Business Valuators can offer experience-based support.