Certified Valuation Analyst (CVA) Practice Exam

True or False: Fair market value is a premise of value in divorce cases.

1. True

2. False

3. It's case-dependent

4. Only in contested cases

The correct answer is: False

Fair market value is indeed a widely recognized premise of value, particularly in divorce cases, where the valuation of assets is crucial for equitable distribution. In these scenarios, fair market value represents the price at which property would sell under normal conditions, emphasizing the importance of a willing buyer and a willing seller. In divorce proceedings, determining the fair market value of marital assets ensures that both parties receive a fair and equitable split. Courts generally prefer this valuation method because it reflects the actual market conditions, providing a realistic figure as opposed to hypothetical or distressed values. It's important to understand that while other valuation methodologies can be applied, fair market value is often seen as the standard approach unless specific circumstances dictate otherwise. This is why affirming that fair market value is a premise of value in divorce cases is accurate.