When two parties separate, they may be unable to agree the value of their capital assets. When this occurs in financial proceedings, the Court has the power to step in and order the valuation of such assets. We will explore this in further detail below.
Valuing properties during financial proceedings
When two parties are unable to agree the value of the family home or any other properties that they may own, the Court has the power to order that the same be valued by a ‘single joint expert’. This is typically a chartered surveyor.
In cases where the Court makes such an order, the parties will need to make enquiries with experts to ascertain their estimated fees and timescales. The parties will be expected to agree the identify of an expert, however, the Court will once again step if in they are unable to do so.
The expert will be instructed to inspect the property/properties and thereafter prepare a valuation report. This report will be addressed to the Court and sent to both parties.
The Court will then attribute the expert’s valuation to the property/properties in question when calculating the total assets in the case. One party may be unhappy with the value given. However, it can be very difficult to challenge this and it could also cause legal fees to increase.
Valuing businesses during financial proceedings
Where a case involves one or more businesses, the Court may order that a valuation report be prepared in respect of the same. Such reports are usually undertaken by an accountant with experience in undertaking valuations for matrimonial purposes. It is extremely important that you get proper advice before instructing an expert to value a business, as parties will want to make sure that appropriate questions have been asked of the expert beforehand. The expert will be instructed in the same way as is set out above, and will be asked to consider a number of factors when arriving at their valuation. For example, the expert will be asked to comment on the liquidity of the business and the ways in which the assets and/or capital of the business could be utilised to achieve a settlement if possible. There are other factors that the expert will need to comment on, including tax implications, etc. and that is therefore why it is very important to discuss matters with an experienced family lawyer before instructing an expert of this nature.
Valuing pensions during financial proceedings
When one or both parties have pension arrangements, depending on the value of the same, the Court may order a pension sharing report. This type of report will be undertaken by a pension actuary. In order to undertake their report, an actuary will require a valuation of the pension arrangements involved. Such valuations can be obtained by contacting your pension provider directly. The Court and the actuary will require a valuation known as a ‘cash equivalent valuation’ or ‘CEV’ for short. It is important that these are requested as soon as possible, as depending on the type of pension arrangement/s involved, it can take a number of months to obtain a CEV.
Valuing other capital assets during financial proceedings
There are other types of valuations that the Court can order to take place and this will largely depend on the assets involved in a particular case, the estimated value of the same and whether there is a dispute between the parties in relation to them. For example, where parties own valuable pieces of art, an expert may be instructed to value the same and thereafter prepare a report addressed to the Court. This can similarly apply to cars, expensive items of jewellery, handbags and parcels of land. The list is non-exhaustive and when deciding whether to order a valuation, the Court will bear in mind whether it is proportionate or not to do so.
If you are thinking about taking steps to divorce your spouse or are at a stage in your divorce where you are looking to divide your assets, please do not hesitate to contact one of our expert family lawyers should you need any advice in relation to the information set out above, or the process generally. We will also be able to discuss with you the possible impacts of Covid-19 upon valuations and the way that these are therefore currently being addressed by family practitioners and the Court.
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Author: Sam John