Equipment Appraisal Blog | Understanding Machinery Appraisals

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

Posted by Equipment Appraisal Services on Tue, Jun 07, 2016 @ 01:30 PM

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.

Tags: Divorce, divorce appraisal, fair market value

Dealing with Divorce: How an Equipment Appraisal Can Help

Posted by Equipment Appraisal Services on Tue, Mar 29, 2016 @ 10:00 AM

divorce_equipment_appraisal

Divorce is almost virtually never a simple process. When people who shared their lives decide to leave a marriage, it's natural for each party to want what's best for them. When it comes to dealing with equipment values, having a professional equipment appraiser provide a machinery valuation helps ensure everyone gets a fair share of the business. Here's why.

Dealing with Divorce: How an Equipment Appraisal Can Help

  • Equipment values are different that that of home, auto or cash item values. While it's much easier to identify the value of common, everyday items, machinery values can have a range. This range can be manipulated by one party to ensure they're getting a better deal than the other party is receiving. This often plays out that the leaving partner wants a higher amount of the business than the remaining partner is willing to sacrifice out of concerns for whether the business is able to remain solvent. Which ever side of the divorce you're on, having an equipment valuation performed by a certified machinery appraiser means the value will be determined in a way that is fair to everyone.
  • You need to meet legal requirements. Though there are a wide range of appraisal methods that can be used on business equipment, the court system often limits the methodologies that can be used to determine equipment value when dealing with the dissolution of marriage. The most common methodology is determining fair market value, which takes a wide range of changing factors into account, to determine a value that is fair to both sides of the dissolution if the business is to remain in operation.
  • But what if there's a push for one partner to get out of the business? In cases like this or when the equipment needs to be sold quickly so that both parties can receive their appropriate profits, fair market removal may be used.
  • If a situation is in place where both parties want out of the business and need the money quickly to start their lives over, they may be willing to settle for liquidation value, which provides a significantly lower value for the machinery, but tends to produce a solid cash value for the equipment which would then be split equitably among the parties. Though this is a rarely used technique, it is still in place in many no-content divorces and similar situations where neither party is remaining vested in the company's interests.
  • Certified machinery appraisers can work from a variety of positions. They can be hired by one spouse, the other spouse or by council. They can also work for both spouses, helping both parties reach an equitable distribution of the business value. Because divorces often demand a certain amount of testimony, make sure your appraiser has experience working in that type of situation.

Divorce can be a messy process, but equipment appraisals helps make sure everyone's interests are addressed during the process. If you haven't had the chance to speak with a certified equipment appraiser, we're here to help.

Tags: Equipment Appraisal, Litigation, divorce appraisal