Apportionment between Community & Separate Increased trial at DOS $500,000 Less due community (200,000) [70-50 = 20 X 10](reasonable compensation) Separate property = $300,000 Pereira v. Pereira(1909) 156 Cal. 1 method: = Personal Services Pereira “P” Interest on separate property value during the marriage = SP Balance of trial above the SP plus interest equals CP (Requires business valuations unlike Van Camp) – Pereira Method Pereira Method (cont’d) First, compute separate value Value at date of marriage Add interest on from date of marriage to separation Equals of SP to DOS Pereira Method (cont’d) Treat date of marriage value Like a pre-marriage SP savings account earning interest (Case law not specific whether compound or simple) Pereira: Example No. 1 Pereira Example No. 1 Answer Pereira Example No. 1 Answer (cont’d) Pereira: Example No. 2 Pereira: Example No. 2 (cont’d) Pereira or Van Camp? Understanding & Pereira Van Camp Question Which Method Applies? P = Personal service (Pereira) VC = Valuable capital (Van Camp) Capital (equipment/inventory)
Apportionment between Community & Separate Increased at DOS $500,000 Less due community (200,000) [70-50 = 20 X 10](reasonable compensation) Separate property = $300,000 Pereira v. Pereira(1909) 156 Cal. 1 Pereira method: “P” = Personal Services Interest on separate property value during the marriage = SP Balance of above the SP plus interest equals CP (Requires business valuations – unlike Van Camp) Pereira Method Pereira Method (cont’d) First, compute separate value Value at date of marriage Add interest on from date of marriage to separation Equals of SP to DOS Pereira Method (cont’d) Treat date of marriage value Like a pre-marriage SP savings account earning interest (Case law not specific whether compound or simple) Pereira: Example No. 1 Pereira Example No. 1 Answer Pereira Example No. 1 Answer (cont’d) Pereira: Example No. 2 Pereira: Example No. 2 (cont’d) Pereira or Van Camp? Understanding Pereira & Van Camp Question Which Method Applies? P = Personal service (Pereira) VC = Valuable capital (Van Camp) Capital (equipment/inventory) trial trial
2017%20AFLC%20Day%20Two%20Outline%20Business%20Valuation.docx