Use of Industry-Specific Appraisers in Divorce Actions

Many business owners do not think about having their business appraised until they are faced with the prospect of divorce. Whether it’s a small family-owned business or a large company with multiple stakeholders, ownership can make things more complicated when a marriage comes to an end. In such instances, it may become necessary to determine the value of their business. While general appraisers may be able to approximate a business's value, using qualified appraisers who specialize in valuing businesses within a specific industry ensures that the business is assessed accurately, so that courts can fairly divide assets. If you have questions about the use of industry-specific appraisers in divorce actions, it is wise to confer with an attorney as soon as possible. The assertive Dallas divorce attorneys of McClure Law Group can assess your case and take the steps necessary to help you safeguard your assets.

Under the Texas Family Code (the Code), the division of marital property must be just and right, considering numerous factors, including the nature of the property, the financial situation of the parties, and the length of the marriage. When it comes to business valuations, courts generally rely on expert testimony to ensure that assets are accurately valued. The Code allows for the use of appraisers, including industry-specific experts, to assist in this process. The appraiser's role is to provide an objective assessment of the business’s value, taking into account relevant industry-specific factors.

Courts may also appoint a neutral third-party appraiser when the parties cannot agree on a valuation. In such cases, the court typically gives significant weight to the findings of the appraiser, especially when the appraiser is an expert in the relevant industry. However, it is important to note that while the appraiser’s opinion is influential, the court retains the ultimate authority in determining the division of assets.

The use of industry-specific appraisers is crucial in divorce actions involving businesses because general appraisers may lack the expertise to accurately assess a business within a specific industry.

Industry-specific appraisers are professionals who specialize in valuing businesses within particular sectors, such as real estate, healthcare, or technology. These appraisers have an in-depth understanding of the industry’s financial structures, market trends, regulatory issues, and other factors that can influence a business’s value. Their specialized knowledge ensures that the business is valued based on the unique characteristics of its industry rather than using a generic valuation approach. This is particularly important when the business is one of the most significant marital assets, as an accurate valuation is essential to ensuring a fair division of property.

The complexity of business valuation makes it difficult for general appraisers to provide an accurate estimate, especially in industries with unique financial structures and risks. For example, in a divorce involving a medical practice, an appraiser with expertise in healthcare will be able to evaluate factors like the value of patient relationships, the impact of medical regulations, and the specific financial risks in the healthcare sector. Similarly, in a divorce involving real estate investments, an appraiser who understands real estate markets can assess property values, rental income potential, and other industry-specific factors.

Additionally, industry-specific appraisers can help resolve disagreements between spouses regarding the business’s value. These disputes are common in divorce cases, especially when one spouse has a greater knowledge of the business than the other. By relying on an expert appraiser, both parties can receive an independent and unbiased assessment of the business’s worth. This can help prevent lengthy legal battles and ensure that the division of assets is based on a fair and accurate valuation. In some cases, the appraiser's testimony may even be used in court to substantiate the valuation and support a just division of property.

The use of industry-specific appraisers in divorce actions can help parties ending their marriage avoid common pitfalls that arise when valuing a business and ensure that all relevant factors are considered. If you want to learn more about your options with regard to valuing your business in a divorce action, it is prudent to contact an attorney. At McClure Law Group, our skilled Dallas divorce attorneys possess the knowledge and resources needed to help you protect your interests, and if we represent you, we will work tirelessly on your behalf. Our primary office is in Dallas, and we are available to meet clients by appointment at our Collin-County office, which is located in Plano. We regularly represent clients in family law proceedings actions in Dallas, Fort Worth, Frisco, McKinney, Richardson, and Garland. We also serve clients in Collin, Denton, Rockwall, Tarrant, and Grayson counties. To set up a meeting with us, call us today at 214.692.8200 or reach out through our online form.