The first step is to value to all the assets, liabilities and financial resources in which the parties have an interest. Assets may include the family home, motor vehicles, savings, shares, a business, artwork, jewellery or antiques (to name a few).
There are several ways that parties can attribute value to a particular item.
Where the parties agree on the value of the property.
The first and simplest way to value property is by agreement.
For assets such as your savings, an up-to-date bank statement will establish the value. For other assets, such as the family home, motor vehicles and home contents, the relevant market will establish the value. Essentially, the value of the asset is what someone is willing to pay for it.
Parties may look to third party services with knowledge of a market for assistance in arriving at a value, eg. Redbook.com.au for motor vehicles or real estate market appraisals for real property.
When determining the value of second-hand furniture, consider the price you would likely receive for the item at a garage sale.
To reach agreement, one party may propose a list of assets (and liabilities) and values and the other party has the opportunity to agree with the values or propose alternate values.
The value of the assets, liabilities and financial resources are usually taken to be at their current value and not the value at the date of separation.
Where the parties cannot agree on the value of the property.
If the parties are unable to agree on the value of an asset, liability or financial resource, the parties may engage the services of an independent third party to provide a valuation. This will usually be at a cost to the party seeking the valuer’s advice, or else the parties can agree to share the costs evenly.
A valuer has specialised knowledge of the market in which the asset may be sold.
If either or both parties own a business, it’s important to attribute a value to it. Typically, this will mean jointly instructing an independent forensic accountant to perform the valuation.
If either or both parties own a business, it’s important to attribute a value to it. Typically, this will mean jointly instructing an independent forensic accountant to perform the valuation. Alternatively, the accountant for the business may express an opinion (at a lesser cost than engaging an independent forensic accountant). Caution needs to be exercised in utilising the business accountant as he or she may not be truly independent.
Where parties cannot agree on an independent valuer.
Parties may apply for the nomination and appointment of a valuer through an independent institution eg. the Australian Property Institute.
If parties to Court proceedings cannot reach an agreement regarding an independent valuer, they can each engage an expert to provide an independent report or the Court can appoint a single expert to produce evidence. It ultimately falls upon the Court to decide upon a final figure based on all relevant evidence.
If you have any queries or would like advice specific to your circumstances, please don’t hesitate to contact our team.