Equipment Appraisal Blog | Understanding Machinery Appraisals

It may be an anomaly brought about, in part, by the pandemic, or it might just be a coincidence. The fact is that we are seeing a lot more divorce cases happening in 2021 than in previous years. As a result, requests for valuation services in this arena have been on the rise.

Equipment and business appraisers have been busy working with divorce attorneys and their clients, as the age-old dispute between separated spouses revolves around a fair separation of assets. When both parties are co-owners in a business, there is going to be a need for an independent appraisal from an experienced valuation firm, which can look to assist in facilitating a settlement. If the shared business includes significant tangible assets, such as construction and manufacturing machinery, trucks and trailers, or any type of personal property, the need for an accredited machinery and equipment appraisal will be important. A certified business appraiser will then consider these tangible values in their overall analysis.

Appraisers act as unbiased neutral parties, providing a fair market value for your equipment and associated business. The intention is to put to rest the concerns either party may have in regard to prior assumptions or discussions on their company’s worth.

In certain cases, both sides in the divorce will engage their own appraisers with the potential for arbitration or litigation to determine the most credible report or allow consideration to both valuations if they are not too far apart. Regardless of the circumstances, it is important to engage with an accredited or certified appraiser with the experience and credentials to effectively assist in the process.

If the business is still operating and in decent financial shape, the Fair Market Value of the assets would be the appropriate measurement level. If the company has been recently idle, or there are plans to close up shop in the very near future, a liquidation premise may need consideration. Ideally, both parties are on the same page with the overall process, however, if this is not the case, the party who engaged the experienced appraiser should have an advantage in the ongoing proceedings.

Understanding all that is involved during a divorce, including the need for an accredited or certified equipment appraisal can ensure you are receiving the best settlement possible.

He said, She said: when it comes to a divorce, many of us know it can be very stressful. With all that is happening to determine your future, you probably are not considering the importance of an equipment appraisal. If there is a business associated with the split, however, you need to look at this option, as there may be significant value in the tangible assets of the jointly owned company. An independent valuation by an accredited or certified appraiser of the tangible assets for the business, whether it is a trucking company, construction contracting business, landscaping or any similar operation is vitally important. In addition, the report will be supportable in court and take away any biased information you may be receiving from the other side. Here is what else you need to know:

The appraiser will act as a neutral party, providing a fair value for your equipment. If your appraisal report is not prepared by an accredited or certified equipment appraiser, it will likely be contested or thrown out in court during proceedings. If you believe there is a likelihood that the litigation will evolve into court proceedings, you will also want the appraiser to have experience as an expert witness, testifying as to the credibility and accuracy of the valuation report.

The most common premise, or definition of value utilized for divorce proceedings is Fair Market Value, however you should check with your attorney to ensure this is appropriate in your case. There are liquidation values you may need to consider as well, that can be reviewed and discussed prior to the engagement. Both parties should agree to the appraisal, however, if this is not possible, the fact that you engaged an experienced appraiser on your own will carry a lot of weight in ultimately determining value.

Understanding all that is involved during a divorce, including the need for an accredited or certified equipment appraisal can ensure you are receiving the best settlement possible. You or your legal counsel can get in touch with one of our professionals at equipmentappraisal.com to discuss the details further and receive a free quote for our services.

Let's face it - nobody gets excited about a dissolution. Whether it's your business, a partnership or a marriage, breaking up something that's worked well in the past can be a difficult and trying process. But instead of simply getting it over with, you may want to consider how to protect your interests before you lose out. Here's how to use an equipment appraisal to help document your assets in a way that will hold up well during negotiations and in legal circles.

What do you need to know to protect your interests in a dissolution?

We've all heard horror stories about how a dissolution can come out badly. Whether it's the businessman who lost the company Jaguar and computer lab while taking care of the employees or the divorced individual whose ex sold off all the equipment at a pittance, it's important to know what to do in these situations. Doing nothing will often leave you with nothing.

But what if you're not sure how much your assets are worth? As an example, an insulator in northern Minnesota was a handy sort. When he started his business, he had purchased a box van and installed a blower system for cellulose insulation. Because he had a keen eye for mechanical maintenance, the system was in excellent condition when, after many years in business and no takers to buy the company, he dissolved the business. The system had been fully depreciated many years before, yet it still retained excellent value because of the care it had received over the years.

On the books, the equipment had no value. In real life, it was worth quite a bit, especially when an enterprising sort from a few hundred miles away contacted him as the equipment sat in his empty warehouse. Years after the equipment had been purchased, the retired insulator ran into the young man who had purchased the machinery. "You know, I would have paid three times what you were asking for that equipment," the young man admitted.

This type of story is classic to any type of dissolution, but when two partners, either in business or marriage, dissolve a business, things can get ugly. If a divorce had been involved in the above case, the spouse could have come back and claimed the husband had intentionally gotten rid of the asset at a low price to avoid paying a fair share for the equipment during the dissolution.

When you have an equipment appraisal performed, you're able to provide documented evidence for the machinery's value. One party in the dissolution may claim equipment has a much higher or lower value to cause problems or get more out of the situation. The best way to resolve the issue is by having an independent third party determine the fair market value of the assets involved. This ensures that both parties get a fair shake out of the deal.

Dissolution is never fun, but it can be less painful if you take the time to protect your interests during the process. But don't expect your local equipment sales rep to provide you with a solid appraisal that will hold up in court! When you work with a certified equipment appraiser, you'll get a fair report of your equipment values that meets or exceeds legal requirements that won't be thrown out if things get ugly.

He said, she said, they said - when it comes to dealing with a divorce, it's a very stressful time. The last thing you may be thinking about is getting equipment appraisals performed on your machinery assets. But when both parties are in a business together or if one party is contesting the divorce, you'll need to have a certified equipment appraiser take a look at what you have and prepare a report that will hold up in court. What's more, you'll need to have a particular type of machine appraisal performed to meet legal requirements. Confused? We'll help you figure it out. Here's what you need to know:

Before You Sign on the Dotted Line: Why Equipment Appraisal is Vital in a Divorce

Why Get a Certified Machinery Valuation?

A machinery valuation helps determine the value of equipment assets during a divorce. But what many people do not realize is that the type of appraisal is different depending on the situation. There are some legal restrictions, depending on your location, that control the type of appraisal that must be performed in a divorce. But beyond the type, you'll want to make sure your appraiser is certified. Why? Certification shows that the appraiser has been trained in standardized equipment appraisal techniques and types, ensuring they'll know how to apply the proper methodology to your equipment appraisal.

They'll also be a neutral party, providing a fair value for your equipment. If your appraisal report is not prepared by a certified equipment appraiser, it will almost certainly be contested or thrown out in court during proceedings. Even if your appraisal was performed by a certified machine appraiser, your spouse may choose to contest the report either out of an abundance of caution or out of spite to drag out the proceedings or force your hand in another area. In that situation, it's vital that you work with a certified machine appraiser who has experience as an expert witness.

What Type of Valuation Do You Need?

Beyond making sure that your equipment appraiser is certified, you may not realize that the law in some areas controls what type of appraisal can be used in divorce proceedings. Fair market value is typically used, with both parties agreeing to use the same independent certified appraiser. If one partner is pushing to get out of the business, fair market removal value may be used, which accounts for the cost of removing permanently-affixed machinery from a business location. In cases where both parties want to quickly leave the business and have the cash to start over, orderly liquidation or forced liquidation values may be used to speed the process along. Though this is relatively rare, it does show up in no-content divorces where neither party wants to retain an interest in the business. 

Though nobody wants to go through a divorce, knowing what's involved in deciding what to do with equipment assets can help a great deal. Remember, you'll want to work with a certified equipment appraiser to ensure your appraisal report will hold up in court and against legal scrutiny.