This is our last post in a three-part series on the designation and division of community property in an Arizona divorce. Today we discuss the important role that the experts play in valuating marital assets. Who are the experts?
• REAL ESTATE: Real Estate Appraisers and Real Estate Agents
• PERSONAL POSSESSIONS: Personal Property Appraisers
• BUSINESS: Business Valuators
Community Property Valuation in Divorce.
Before the Court will divide the parties’ community property in a divorce, the marital assets and debts must be valued. If the couple owns two automobiles, for example, then Kelley Blue Book values may be used as one reasonably accurate method of placing a local market value on both cars.
After the marital property has a value placed upon it, the Court will divide the community property equally. The Court has broad discretion over a final division and distribution, and the parties are encouraged to negotiate and arrive at a separation agreement voluntarily (or turn the division of community property over to the family law judge to decide for them). The Court would be within its discretionary power, for example, to divide some marital assets in kind, to require the sale of others with a division of the cash proceeds, and to defer the distribution of certain community property until a future date.
Real Estate Appraisers and Real Estate Agents.
When the marital asset is real estate, there can be no better choice for valuation then someone working in the field, namely real estate appraisers and real estate agents. All real estate appraisers, real estate brokers, and real estate agents in Arizona must be licensed!
Real Estate Appraisers. For an estimated value of residential or commercial real property, seek the expertise of a certified residential appraiser (for residential real estate housing up to five families) or certified general appraiser (on any type of real estate). The real estate appraiser prepares a detailed summary report on the subject real property, including permitted and potential uses, comparables in the vicinity, construction methods, materials used, and more.
Real Estate Agents. The best real estate agents really know their turf – they are very knowledgeable about the market area they serve. The real estate agent knows what properties are currently for sale in the target area and can provide reliable information about listing averages:
• Average number of days on the market before properties sell.
• Average selling price.
Personal Property Appraisers.
Personal property appraisers of antiques, collectibles, guns, art, furniture, and so on, are often associated with auction houses. In this profession, experience really does make a difference. As seen over the years on PBS’s Antiques Roadshow, it may take more than one appraiser’s expertise to get the personal property valuation job done. (A worthwhile effort, see our resource below for the $1,000,000 bowls!)
When a community asset includes one or more business operations, we make use of a detailed valuation prepared by a business valuator or forensic accountant. These professionals are certified public accountants (CPAs), so they must be certified and licensed by the state. The business valuator investigates the financial operations of a business, a process that takes several months or longer depending upon the complexity of the enterprise. He or she will interview key persons, will analyze business records, and will provide a comprehensive summary report that supports the final estimate.
At the Law Offices of Scott David Stewart, we have the legal and financial resources required to properly value complex community estates. Our divorce attorneys work with real estate experts, forensic accountants, business valuators, personal property appraisers, and private investigators to identify and accurately value our clients’ marital assets and debts.