Filing for Divorce: Hire your current CPA or a Valuation Expert in Divorce Court?
Many people have valuation questions when filing for divorce. One of the main questions is whether or not they should use their current CPA to provide valuation services or expert witness testimony in family law court.
Many people going through divorce assume that since their accountant or CPA has worked with them for many years then it would make sense to use them to prove the value of the business, provide maintenance calculations, or testify in court.
The reality is that alimony, child support and company valuation issues are complicated matters. Business valuations are usually handled by people who have many years of experience and a business valuation credential such as CVA, ABV or ASA which are just some of the available certifications.
So the first question you need to ask your CPA, accountant or bookkeeper is whether they've completed any business valuations in the past. Another good question is whether they have received any formal training regarding business valuation methods.
Another good question to ask is if they have some experience in providing valuation services to other companies. The next question could be whether they have ever testified in deposition or trial for a divorce proceeding.
It is one thing to be able to give someone a rough estimate of value and it is quite another to truly understanding business valuation methods and to be able to complete a full valuation of a company. It is a whole different matter to able to testify regarding the valuation report or calculations.
There are several areas of valuation which are important when testifying in divorce court. Most professional valuation experts are well-versed in applicable court cases, the difference between personal and enterprise or business goodwill.
For divorce it is importance that the expert understands the rules for each state within which they work. Typically this requires some experience or prior testimony in the family law area.