In the first of what we hope will be a series of ‘Top Tips’ articles we will be exploring various aspects of the Divorce process and procedure. Today we look at the importance of valuing the assets in divorce correctly and the main things to look out for when carrying out valuations in divorce proceedings.
The Divorce Valuations Process
When parties divorce or dissolve their civil partnership, it must be decided how the assets are divided. Those assets often include one or more properties as well as other types of asset (such as shares or pensions). There is an interplay between all of the assets and putting a figure on them is therefore very important. This is what we call the valuation process.
The theory is that once every asset is assigned a value, some fairly standard rules and principles can be applied to determine how all of the assets should be distributed. Assets can be assigned a value by simply agreeing one and if agreement cannot be reached then the asset can be expertly valued by an expert who owes their duty to the Court.
Expert Divorce Valuations
The process of expert valuation is contained in the Financial Procedure Rules. It is very important to remember that the cost of valuing any given asset must be proportionate. If one party insists on a valuation which costs a disproportionate amount in fees, that person is likely to be penalised by the judge. This penalty may mean they have to pay for the valuation and some of the other party’s costs associated with dealing with the valuation. This is reinforced by what is known as the Overriding Objective which requires all parties to deal with cases in an efficient and cost effective way.
Don’t be an Ass
Don’t pay an equine expert £5,000 to value a Donkey which is destined to be worth £500 at best!
Do try to agree a value for all assets and remember that the value is what one may reasonably be expected to realise in a sale. It is not an insurance valuation. If a party insists that an unrealistic valuation is correct, they are likely to mire the whole litigation process in delay and additional cost, which they themselves may end up paying for.
Parties should always consider a few informal valuations before considering paying an expert for divorce valuations.
- Antiques and jewellery – dealers and auction houses will generally give an indication of what valuable household items are worth.
- Property – Local estate agents will give a market appraisal of property at no charge.
- Cars – Autotrader and the Glass’s Guide will give an indication of the value of almost any car.
- Investments – Shares have a value at any given time – just don’t forget to keep that value updated.
- Pensions – Pensions have what is known as a Cash Equivalent (Transfer) Value (CETV) and this will be provided free by the pension provider 1 or 2 times per year
We hope this article has given you some food for thought. As is so often the case the devil’s in the detail and the best tip we can give anyone in this situation is to take legal advice from a specialist family lawyer. Paradigm Family Law have a team of experienced lawyers to help guide you through the process of divorce, just waiting to hear from you.
If you would like more details on this or want to discuss your family law matter, please do not hesitate to contact James, Frank, Evelyn or Paul. Paradigm Family Law offers a free initial consultation and our fixed fee solutions cover financial proceedings from start to finish. You can call us on 0845 6020422 or email us to [email protected].