Business valuation is a process, a set of procedures, used to estimate the economic value of an owner's interest in a business. Valuations are used to determine the price a party is willing to pay or receive to perfect a sale of a business interest. The same valuation tools are often used by business appraisers to resolve disputes related to divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, estate and gift taxation, and many other business and legal purposes.
Family Law Matters
Family law consulting, with attorneys and their clients, includes analyzing the complex financial issues frequently associated with a divorce. We work closely with legal professionals in matrimonial litigation support and are familiar with current case laws and rulings as well as state statutes. We also understand the need to be flexible and practical in litigation matters.
Business Valuation – Frequently, one of the assets included in the marital estate is an interest in a closely-held business. It is typical to have that business or business interest valued. In some ways, marital dissolution business valuation requirements differ from traditional business valuations. It helps to be familiar with the applicable premise of value, standard of value and relevant case laws of the jurisdiction in which the divorce takes place. For example, in some states, Pennsylvania included, goodwill specifically associated with an individual that will not survive the dissociation of the individual from the business is excludable from distribution, while in other states all personal goodwill can be included. Crumling & Hoffmaster brings the credentials, specialty experience and analytical skills necessary to properly value your, or your client’s, business interest.
Net Income Available for Support – Another frequent issue that arises in dissolving a marriage is the determination of the amount of “net income” that is available for support purposes, both child support and spousal support (APL). The issue becomes complex if the earnings of one or both spouses are non-traditional. Regular wages are normally less complicated to evaluate in a divorce case, while income from businesses, real estate, and other investments become more complex. While there are state statutes on what should be included in net income available for support, the law on this issue has been evolving for decades as new cases are decided by local and appellant courts. It is important for the financial expert consulting in marital dissolution cases to be familiar with various types of income and cash flow that can occur in divorces, as well as the different views of how and why they should be included or excluded. Crumling & Hoffmaster brings the credentials, specialty experience and analytical skills necessary to properly determine net income available for support for you, the other party to the marriage, or your client.
Forensic Accounting Services – Forensic accounting - the use of accounting skills to investigate fraud or embezzlement and to analyze financial information for use in legal proceedings. For couples with complex financial holdings, including business interests, investment and real estate portfolios, multiple bank, credit and loan accounts, etc., properly valuing a business or other assets, determining net income available for support, or structuring a fair and equitable distribution of marital assets can be especially challenging when underhanded maneuvers are suspected. A forensic accountant reviews financial records with an eye not only for what is shown, but also for what may be withheld. Forensic accountants familiar with divorce proceedings know where to look for information and how to assist legal teams in asking the right questions to be able to provide a more accurate financial picture of the marital estate. Crumling & Hoffmaster brings the necessary credentials, specialty experience and analytical skills to you or your clients when there is an underreporting of income, business profits or assets; or an overstating of business expenses or liabilities.
Expert Testimony – Whether it is a business valuation, determination of net disposable income available for support or some other professional opinion in a litigation matter, a valuation report that is clearly written and understandable is critical. Unfortunately, however, it is not always enough to allow the parties to reach a resolution without a trier of fact. If you require expert witness testimony, whether before a Judge, Divorce or Support Master, or jury, Crumling & Hoffmaster is experienced in presenting an independent, professional opinion with the clarity and precision needed.
Collaborative Consulting – Collaborative Law is a voluntary dispute resolution process in which the parties reach agreement without going to court. For those couples who are willing to seek creative and amicable problem-solving, Collaborative Law provides a constructive alternative to conventional divorce. Greg is a collaboratively trained financial neutral. The financial neutral is most commonly hired by the couple, rather than one spouse or the other, to serve as a single neutral financial expert in a Collaborative Divorce. Instead of dueling financial experts focusing on separate positions, in a collaborative setting, the financial neutral puts the focus on the needs of both parties, which helps foster an atmosphere where creative solutions can be developed. The focus of the financial neutral's role is primarily informative and educational so the clients can make thoughtful and informed decisions.
An expanded and more detailed list of services Crumling & Hoffmaster can provide in family law matters includes:
Education about pertinent financial matters.
Assistance in gathering and organizing financial information concerning income and expenses, including preparation of monthly income and expense statements.
Assistance in gathering and organizing financial information concerning assets and liabilities, including preparation of a draft inventory and schedules of property.
Preparation of cash flow projections including disposable income available for support purposes.
Preparation of tax calculations, excluding actual preparation of Federal, state or local income tax returns for government filing purposes.
Preparation of business valuations for operating entities, investments, limited partnership interests, etc. held by either party.
Preparation of ranges of present or future value.
Encouragement for formulation of realistic future plans for income and expenses.
Assistance in developing and analyzing options for allocation of income and expenses.
Assistance in developing and analyzing options for division of marital estate assets and liabilities.
Assistance in tracing separate property or preparation of reimbursement or economic contribution claim(s).
Assistance in negotiating an acceptable financial outcome.
Additional responsibilities as appropriate to the subject matter and agreed upon by the client and the attorney.
Crumling & Hoffmaster services are consistently performed with the utmost respect for confidentiality, while also giving attention to the family’s needs and the team’s strategy for the best outcome for everyone as the ultimate goal.
Contact Crumling & Hoffmaster to discuss how we can be an integral part of your marital dissolution team.
Employee Stock Ownership Plans (ESOPs)
The team at Crumling & Hoffmaster has been providing business valuation services for ESOPs for more than 20 years. We have an extensive knowledge of ESOPs and are often engaged to consult with business owners, trustees, and attorneys on ESOP transactions and feasibility studies. Our experienced professionals have been involved with hundreds of business valuations for ESOP purposes, including the preliminary valuations for ESOP feasibility and planning purposes, plan implementation (including fairness opinions), annual valuations for administrative purposes, and plan termination. In our role as financial advisor to both newly-formed and existing ESOPs, we are engaged to assist ESOP Trustees in fulfilling their fiduciary obligations to ESOP participants in both ESOP transaction fairness opinions and employer stock valuations. Our dedicated professionals are relied on to provide an independent determination of value to help ensure that the ESOP maintains compliance with the Department of Labor and other regulatory requirements.
Transaction fairness opinions are issued by an independent financial advisor to the ESOP Trustee to assess the fairness, from a financial point of view, of the pending purchase or sale of the sponsor company stock. A fairness opinion provides the basis for the ESOP Trustee to accept, or not accept, the proposed transaction. Crumling & Hoffmaster’s advisors have been trusted to provide fairness opinions on numerous ESOP transactions to assist trustees in making important decisions and in fulfilling their fiduciary responsibilities.
Contact Crumling & Hoffmaster to discuss how we can be an integral part of your ESOP team.
Estate, Gift and Income Tax Compliance
Business valuations are a critical component of successful tax planning strategies. For over 20 years, Crumling & Hoffmaster’s team of professionals have been providing independent business appraisals for estate and gift tax reporting and related planning purposes. Crumling & Hoffmaster’s services are trusted by business owners, attorneys, accountants and other estate planning professionals to provide objective and defensible opinions of value that have been proven to withstand scrutiny from the Internal Revenue Service and other regulatory agencies.
Crumling & Hoffmaster’s Estate, Gift and Income Tax Compliance Valuation Services Include:
Business Valuations for Estate and Gift Tax Compliance
Valuation of Privately-Owned Company Shares
Valuation of Interests in Family Limited Partnerships (FLPs) and Limited Liability Companies
Family Wealth Planning
Valuation of Stock Options and Other Equity Instruments
Valuation of Intangible Assets
Corporate Tax Planning, Including Reorganizations and Recapitalizations
Contact Crumling & Hoffmaster to discuss how we can be an integral part of your Estate and Financial Planning Team.
Commercial Disputes and Forensic Investigations
Forensic accounting services generally involve the application of specialized knowledge and investigative skills possessed by CPAs to collect, analyze, and evaluate evidential matter and to interpret and communicate findings in the courtroom, boardroom, or other legal/administrative venue.