Let’s face it; the economy is in a major downturn. For many, times are not just tough economically, but they are also tough at home. Unfortunately, the course of action for the latter is often to get a divorce. In a tough economy, however, the cost of a divorce, which averages $25,000 – $40,000 nationally, may be very tough to handle.
In a February 2, 2009 article published by the Connecticut Law Tribune entitled “Breaking Up Is Harder To Do”, many divorce lawyers are witnessing the economic downturn take a toll on their business. More clients are opting for pro se filings (meaning they have chosen to represent themselves and not hire an attorney), or are delaying divorce proceedings because they have run out of money. Unfortunately, some couples have even opted to refrain from divorce proceedings altogether, and carry on with their unhappy marriages.
For those that have decided to proceed with a divorce, there are some ways to reduce cost. For example, agreeing on a business valuation expert, either in a mediation/collaborative setting, or through their individual counsel, can be one way to reduce the overall cost of the process. By jointly hiring an independent and certified business valuator, the divorce proceeding will be expedited, more economical, and less contentious.
Now more than ever, family judges and mediators throughout the U.S. are looking to certified business valuation professionals to render independent opinions for financial projections, identification of tax issues, analyses of investments and other financial holdings, appraisals for privately held businesses or Family Limited Partnerships, or other substantive financial matters.
Of the vast financial designations and certifications in the business world, there are only a select few that are recognized as business valuation credentials. Of these, the most esteemed are the Accredited Valuation Analyst (AVA) and the Certified Valuation Analyst (CVA) designation issued by the National Association of Certified Valuation Analysts (NACVA), which are the only business valuation credentials in the U.S. accredited by the National Commission for Certifying Agencies (NCCA). According to the NACVA website, the only difference between a CVA and an AVA is that a CVA also holds a CPA certification; an AVA generally holds advanced business degrees, such as an MBA or PhD, or both.
The strategy of cutting costs during a divorce proceeding and jointly hiring an expert begs the obvious question: Will the outcome change? A recent article referenced by The Connecticut Council for Divorce Mediation and Collaborative Practice and also presented to the Connecticut Bar Association Family Law Section, examined financial outcomes in Connecticut divorces over a period of several years, for those both mediated and contested, and found no significant differences in outcomes. Thus, by cutting costs, it does not necessarily mean that the outcome will be any less desirable.