26 Nov Valuations in Property Settlement Matters
The Family Law Act 1975 determines how to divide property following the breakdown of a relationship. An important step in this process is to identify and value the assets that form the property pool. Property or business valuations will help establish both the value of the interest but also identify if there are any issues in potentially dividing or transferring the asset as part of any settlement proposal.
If the parties can agree to the value of a property or business interest, it is likely that the Court will accept an agreed value. Parties may rely on documents such as market appraisals or financial documents to assist in establishing a value. We recommend that parties obtain independent advice from their accountants, financial advisors or real estate agents if they are unsure.
If parties are unable to reach an agreement, they may choose to engage an independent expert valuer to value the asset or interest held by the parties or either one of them.
In relation to business valuations, it is important to remember that when a business is valued for the purposes of a property settlement, it is often not the same as the value a business would be sold for. In property settlement matters, the valuation looks at the value to the owner, in other words, what would be the benefits that you would receive if you retained your interest in the company?
The characteristics of all businesses vary, so there is not one set method that is used to value a business. Instead, there are a number of methods open to valuers, and they will choose the one that best suits the business in question.
Once a valuation has been undertaken, it can be relied upon during the course of any negotiations between the parties and in most cases, will help to facilitate negotiations and may assist in reaching final settlement.
If you have a property settlement matter that may require valuations, you should contact our office on 4929 2225 to speak with one of our experienced family law solicitors.