A Tangled Web: Problems Arise when Appellate Court Awards ‘Equalization Payment’

A Tangled Web: Problems Arise when Appellate Court Awards ‘Equalization Payment’

Posted on

It happens, likely more often than we know.  A couple gets a divorce and the judge awards the non-business owner an “equalization payment.”  In many cases, that is the end of the story. However, in some cases, it is just the beginning.  It can happen that the equalization award is unrealistic for one or both of two basic

reasons. The first is that the business owner’s business interests are illiquid, making it difficult if not impossible for the business owner to pay the equalization payment, at least in the short-term (which is often what is ordered by the court). Secondly, the court may sometimes assign values to the business interests that are not in line with the fair market value of the business interests.

 

©2014 Building Value

 

Questions about a valuation for your estate or business?  The Keiter Valuation and Forensic Services team can help.

Harold Martin_1406_880Contact: Harold G. Martin, Jr., CPA/ABV/CFF, ASA, CFE | Partner, Valuation & Forensic Services


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.


About the Author

Keiter CPAs is a certified public accounting firm serving the audittax, accounting and consulting needs of businesses and their owners located in Richmond and across Virginia. We focus on serving emerging growth businesses and companies in the financial servicesconstructionreal estatemanufacturingretail & distribution industries and nonprofits. We also provide business valuations and forensic accounting servicesfamily office services, and inbound international services.

More Insights from Keiter CPAs

Contact

How Can We Help You and Your Business?

Innsbrook Corporate Center
4401 Dominion Boulevard
Glen Allen, Virginia 23060

804.747.0000 or 804.273.6200

Directions