Excess earnings method – Higher valuation of law practice prevails in divorce case

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Abstract: In divorce, the value of a spouse’s interest in a professional practice can play a significant role in the final financial outcome. However, such appraisals can result in a range of values. In one recent case, Wright v. Wright, the spouse’s expert used a methodology to arrive at a value three times higher than that of the husband’s expert. This article explains why the court disputed the husband’s contention that this “bottom-up” method didn’t apply.