If you have taken the decision to separate from a husband or wife, it is tempting to leave sorting out financial and property matters and things can drift. Alternatively, a husband or wife can rush into an agreement, often without first getting accurate or up to date valuations of property and other assets.
Which Property Should be Valued in Your Divorce?
It is assumed by a separating couple that only the family home needs to be valued as part of their separation or divorce. That is not necessarily correct, as it is important that all relevant property is valued.
What then is ‘’relevant property ’’ that should be valued? The honest answer from a Whitefield divorce solicitor is that it all depends on the individual personal and financial circumstances of a husband and wife. However, property can be relevant even if it is owned in the sole name of a husband or wife. Property does not have to be owned jointly to be relevant to divorce proceedings and form part of the family wealth and financial settlement options.
If a husband and wife are splitting up then consider valuing:
- The family home ; and
- Any second home or holiday home or chalet (including overseas property ) ; and
- Buy to let property portfolio; and
- Any property owned by a family business. This is because if the property is included in the company business accounts the company shares cannot be accurately valued unless there is an up to date valuation of the property ; and
- Any property held within a pension fund, such as a SIPP. This is because the value of the pension fund cannot be accurately ascertained without an up to date value of the property held in the pension fund ; and
- Property owned by a third party, for example a family member, if a husband or wife has a beneficial interest in the property.
An expert divorce solicitor will look at the financial disclosure and advise you on what property should be valued and talk to you about the best way to obtain accurate valuations. The solicitor’s advice may depend on a range of factors, for example, the length of the marriage or when a property was last valued. Sometimes an independent surveyor may have recently valued business or pension property for business related or pension administration purposes. That can mean that a further report is not necessary but careful thought should be given to the purpose of the original valuation and the reliance that can be placed upon it.
Valuing Property in Financial Court Proceedings
The first step in reaching a financial settlement is to find out what the family home and other property and assets are worth. If property and assets are not accurately valued then the financial settlement can result in unfairness to either the husband or wife.
If a couple cannot agree on the value of a property value, a court can order a formal valuation by a surveyor who is a member of the Royal Institute of Chartered Surveyors.
Normally a family judge will say that one surveyor, jointly instructed by the husband and wife, should undertake a valuation of property for use in financial court proceedings. The main advantage of using one single joint expert is there are no conflicting opinions on a property value by different surveyors and costs do not escalate by surveyors going to court hearings to justify their different property valuations.
A single joint expert is:
- Independent of both husband and wife ;
- Will not of had undisclosed prior dealings with either the husband , wife or the property ; and
- Not influenced by whether the property is owned jointly or by the husband or wife or jointly with a third party. This is because the expert is focussed on the value of the property and not its ownership; and
- Under professional and court rules on reporting duties to ensure that the report is independent and impartial.
Specialist Whitefield divorce solicitors also recommend that you take advice on the tax implications of the sale or transfer of property so that the tax bill can be factored into the financial settlement to achieve a fair net result.
A divorcing couple can worry about the cost of getting legal advice, property valuations and tax advice. However, given the importance of knowing how much property and assets are worth before looking at the wide range of property solutions, it is always sensible to get expert advice before deciding what to do. The cost of this advice and preparing any legal documentation is tiny compared to the cost and stress involved if something goes wrong without the right valuations and documentation in place.
For advice about financial settlement options and representation in financial court proceedings please call me on +44 (0) 1477 464020 or email me at [email protected].