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Last month the U.S. Tax Court released its memorandum opinion in Astleford v. Com. (TC Memo 2008-128), a case dealing with the minority and marketability discounts applicable to family limited partnerships. In Astleford, the widow of a Minnesota real estate tycoon contributed her interests in real estate (which included real estate partnerships and trusts) to a family limited partnership (FLP) for the benefit of the parties’ children. In valuing the […]

In Evenson, a recent decision of the North Dakota Supreme Court, the business which was implicated in a divorce action was an insurance agency. The business owner sold multi-peril crop insurance through local banks for which the owner had previously worked. Both valuation experts agreed that insurance agencies are generally valued by applying a multiplier to the agency’s gross commissions over a period of time. The wife of the insurance […]

The Supreme Court of West Virginia recently considered the enterprise goodwill of a professional practice in divorce proceedings in Helfer v. Helfer, 221 W.Va. 625, 656 S.E.2d 70 (November 2007). In Helfer, the business owner’s expert found that his chiropractic practice was worth $41,000, based on a capitalization of earnings. His wife’s expert found the practice to be worth $388,000 based on the excess earnings method. Neither of the experts […]

A recent Florida divorce decision, Erp v. Erp, considered the valuation of an RV dealership acquired by the husband and wife during their marriage. The dealership was organized as a subchapter “S” corporation, of which the husband and wife each owned 40% of the stock. Husband’s son from a prior marriage and wife’s son from a prior marriage each owned 10% of the stock, so that no decisions could be […]

Minnesota’s intermediate court recently clarified the distinction between active appreciation in the value of premarital property, which is considered marital property under Minnesota law, and passive appreciation, which is separate property, in In Re Marriage of Ellingson (2007). The subject business was a custom kitchen cabinetry manufacturer and installer, which the husband began prior to the parties’ marriage. Under relevant case law in Minnesota, active appreciation is defined as increase […]

The Pennsylvania Superior Court’s 2007 decision in Dalrymple v. Kilishekis relatively unremarkable from a valuation perspective. The subject business was a private investigation firm owned by the husband, which was the chief marital asset. Apparently its assets, which were valued at $45,000 as of the date of separation, were mostly or entirely dissipated by the time of trial. Since there were few or no assets left to distribute, the trial […]