Educate your clients about the Standards of Value * They may not know the different types * They need to know about which standard to testify * The other side WILL Cross Examine them * Not as hard as they think
FMV= “The amount that would be paid in cash by a willing buyer who desires to buy, but is not required to buy to a willing seller who desires to sell, but is under no necessity of selling.” Texas Pattern Jury Charge-Family, Sec. 203.1 (2012 ed.)
* Sentimental Value * Often has no market Value * First daughter * Your Pound Puppy
The Current Value as it exits today. Think Cash up front vs. Installment Payments
The Value of an Asset less any outstanding Debts or Liens
The Value Shown on the Books of a Business. Generally, the total value of the Assets as shown on the books less the Liabilities. Careful here as General Accounting Principles do not require the inclusion of contingent liabilities. Also, Corporate assets such as derivatives and real estate values may not be up to date.
Focuses on the value of the property to the owner. Not the same as intrinsic value as it does not focus on sentimentality but rather on other factors such as usefulness and services. Seeing eye dog vs. pet
Value to an investor based on her individual requirements and expectations. The value may be similar to Fair Market Value but really is more driven by the investor’s expectations
The cost it takes to replace an asset. Most often used in fire and theft cases. Rarely used in divorce cases.
No specific definitive definition. Subjective May mean present value Only one four letter word in divorces and it ain’t “Fair”
Market Data Approach Asset Approach Income Approach Cost Approach
Compares the subject property to others similar to and comparable to the asset in question.
Considers ALL assets, those on the books and those off the books, and considers ALL liabilities
Analyzes the property’s income production. Capitalization of earnings method Discounted cash flow method
Applies the capitalization rate to the normalized earnings of the business. Used where a company’s future business is not expected to significantly change
Does not assume stability in a company’s future income stream based on a company’s history. Instead, this method first calculates the expected earnings over a particular future period, incorporates growth projections, changes in the price of the goods or services, and fluctuations in the consumers.
Determines the Market Value of real estate by subtracting depreciation from the replacement cost of the property. May be used when there is not enough data for comparable sales or the market data approach.
An owner can testify about the opinion of the market value of their own property. Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984).
Educate them Make them do research Internet Ebay Craigslist Pawn shops Garage Sales Antique shops
www.Edmunds.com www.kbb.com www.nadaguides.com Ask for year, model, make, mileage, condition and special features
Tax Appraisal Value found at County Tax Assessor’s website Appraisal—Make sure they are credentialed. www.talcb.state.tx.us/Agencyinfo/default.asp Realtor for Market Data Approach—Make sure their license is current. www.trec.state.tx.us/newsandwww.trec.state.tx.us/newsandpublic/licenseelookup.
Is it truly still mobile? Key question: Will moving the mobile home cause major damage to it? If so, then it is probably no longer a mobile home but an improvement to the real estate. If it is an improvement then treat it as a house or real estate. If it truly is still mobile, then go to Kelley Blue Book or NADA for the value.
Take pictures Do an inventory Request access to Gun Safe—Motion to Inventory Safe and Temporary Restraining Order Prohibiting Entry into Safe and Removal of Property Take to gun dealer to appraise
Ask for it in Discovery: Cattle: Heifers or Steer?, Head Count, Weight Breakdown for each sex, Type: Stocker or Feeder? www.cattle.com/markets Horses: Breed, Training, Age www.aqha.com or www.palominohba.com www.aqha.com
RV’s and Boats: www.nadaguides.comwww.nadaguides.com Planes: National Aircraft Appraisers Association Must consider air miles, regular maintenance, features, etc.
www.appraisers.org Business Valuations Gems and Jewelry Machinery Personal Property Real Property
Subjective so really research it www.americanartappraisers.net Antiques.com Pawn shops Collectors websites Collectors associations
No such thing as “investment” jewelry Look at when the jewelry was acquired—around a birthday or anniversary or Christmas? www.gia.edu for a graduate of the gemological Institute of America www.gia.edu www.najaappraisers.com Is it a signed piece? More value GIA certified? More Value
Generally, household items and used clothing and personal effects have no market value. Crisp v. Security National Insurance Company, 369 S.W.2d 326 (Tex. 1963). But, if in Dallas, ask if Wife has designer everything!
Call the Club and find out the going rate Check online for memberships for sale outside of the club by going online Send a business record affidavit requesting club stock information Consider location: Waco Country Club vs. Dallas Country Club
Publicly traded: www.nasdaq.comwww.nasdaq.com Private stock in Closely Held: Send Business Record Affidavit
Start by making a phone call to an intellectual property attorney. Consider splitting rights to it.
Send Interrogatory and requests for production asking for: Type of Crop (Corn, wheat, hay, grazer, cotton, etc.) How many acres per crop Historical yields Dry or Irrigated If irrigated, the size, type and number of sprinklers Input costs into each crop
Do NOT use Appraisal District Value Hire an appraiser who is certified in commercial real estate appraisals
Normally valued on by the Discounted Cash Flow Income Approach Hire a qualified expert Call an Oil and Gas or Probate attorney for suggestions for an appraiser
Hire a Business Appraiser Look for someone who is a CPA AND who is also: Accredited in Business Valuations by the American Institute of CPA’s and Accredited in a Senior Appraiser by the American Society of Appraisers www.appraisers.org
Know that if paid out you should get more Alimony rules—deductible to payor; taxable to payee Judgments—Interest and security