“‘D-I-V-O-R-C-E’ (Apologies To Tammy Wynette)”

By Harold G. Martin, Jr., CPA/ABV/CFF, ASA, CFE, Partner, Valuation & Forensic Services

“‘D-I-V-O-R-C-E’ (Apologies To Tammy Wynette)”

Harold G. Martin, Jr., Keiter Valuation and Forensic Services Partner, shared his insights on business valuation in divorce in the article, “‘D-I-V-O-R-C-E’ (Apologies To Tammy Wynette)”, featured in VSCPA’s Disclosures magazine.

Excerpt from Harold Martin’s VSCPA Disclosures magazine article:

“Unfortunately, in more than 40 percent of marriages, country songs such as Tammy Wynette’s “D-I-V-O-R-C-E” present a real-life storyline.  When these matters involve ownership by one of the parties in a closely held business, CPAs may assist as consultants or serve as expert witnesses in litigation to quanTIfy the value of the propertied spouse’s interest.  This article presents an overview of the applicable Virginia statutes, case law and professional standards, as well as the key concepts with which a CPA should be familiar when valuing a business and classifying property for equitable distribution in divorce.

Highlights

  • While the Code of Virginia defines “equitable distribution” of assets in divorce, it does not specifically define a standard for determining a spouse’s interest in a closely held business.
  • Case law provides a standard of value for determining a spouse’s interest, but it is inconsistent. The landmark case often cited as the basis for standard of value for divorce in Virginia is Bosserman v. Bosserman.
  • The three recognized valuation approaches (income, market and asset) should be considered for purposes of valuing the properties spouse’s ownership interest in divorce, though there are nuances to each.

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About the Author


Harold G. Martin, Jr.

Harold G. Martin, Jr., CPA/ABV/CFF, ASA, CFE, Partner, Valuation & Forensic Services

Harold G. Martin, Jr., is the Partner-in-Charge of Keiter’s Valuation and Forensic Services Group. He is also a member of Keiter’s Executive Committee. He has over 40 years of experience and specializes in valuation and forensic accounting, including financial investigations and litigation consulting and expert witness services. He is a frequent speaker and writer on valuation topics.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

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