Matrimonial appraising is one of the most misunderstood areas of valuation for the attorney, appraiser and the court. Typically, attorneys will seek to obtain a Fair Market Value (FMV) of property. However, in a matrimonial situation, the FMV of property being appraised may differ depending on the nature of the assignment, the type of property being appraised, and the market in which the property might be sold. By using only the general term “Fair Market Value” without specifying a market or valuation method, the attorney leaves it up to the appraiser to determine the methodology and market to be used, which may result in a valuation that is not what the attorney needs, the court expects or the situation requires.
By employing an inappropriate valuation methodology, experts and attorneys risk having their valuations thrown out or even being sued by their clients. In one situation known to the authors, the retainer agreement prepared by a “neutral” appraiser appointed by the court1 to value various items of jewelry spoke only of the “fair market value,” but never defined or identified the value or market to be used. The wife substantially relied on the neutral appraiser’s valuations when she agreed to accept the jewelry in lieu of cash or other assets as part of an agreed upon division of the parties’ assets. However, when the wife (in need of cash) later sought to sell the items, she received no offers close to the appraised values. The wife is currently pursuing claims against the appraiser for substantially overvaluing the items and is considering an action against her attorney as well.
