Equitable Distribution: Valuation of Businesses and Credibility of Experts

Key Takeaways:  When a court distributes a marital business, the court either has to consider the value of marital funds in business accounts as part of the value of the business or value and distribute the marital funds in business accounts apart from the business. As to real property, when an appraiser considered the value of the property after a hurricane damaged the property, but did not conduct a whole new appraisal, that only went to the weight, but not the competency of the evidence, and the court was free to adopt that appraisal as the value, even though another appraiser had conducted a new appraisal after the hurricane and arrived at a lower value. The trial court found that expert lacked credibility. Questions of credibility are “’exclusively within the province of the trial court’ and are binding on appeal when supported by competent evidence.” Lawrence v. Lawrence, 2026 N.C. App. LEXIS 54, *5. 

A North Carolina Court of Appeals opinion issued January 21, 2026, Lawrence v. Lawrence, No. COA25-304, found that a trial court erred when it adopted a value for the marital business that explicitly did not include the value of the marital funds held in company bank accounts, and then failed to separately distribute the marital funds in the company bank accounts. 

In this case, the parties stipulated that the value of the company accounts included $98,843.09 in marital funds that had already been earned and that the remaining funds in company accounts were client trust funds held for material costs and overhead.  The trial court adopted husband’s expert’s valuation of the business of $62,591.57 rather than wife’s expert’s value of $323,000. When husband’s expert was questioned as to whether he considered the marital funds in his valuation of the business, he responded that he did not. 

In a North Carolina equitable distribution case, “the trial court must conduct a three-step analysis: (1) determin[e] which property is marital property; (2) calculat[e] the net value of the marital property . . . and, (3) distribut[e] the property in an equitable manner." Hamby v. Hamby, 143 N.C. App. 635, 638 (2001). Lawrence v. Lawrence, 2026 N.C. App. LEXIS 54, *5.  When a trial court fails to distribute marital property, that is reversible error. Id. 

Here, because the trial court adopted a valuation of the business that explicitly excluded the marital portion of the accounts and did not distribute the marital portion of the accounts, the court erred. “If the trial court accepted a valuation that excluded the accounts, it could not simultaneously treat the accounts as included.” Lawrence v. Lawrence, 2026 N.C. App. LEXIS 54, *7.

The other main asset of the marriage was a Florida home that had been damaged by a hurricane. Husband’s expert valued the home at $900,000, but he did not conduct a new appraisal after the hurricane, while wife’s expert valued the home at $485,000 after the hurricane. The trial court’s order distributed the property to the Wife at Husband’s expert’s value. Wife appealed on the basis that the court valued the property on incompetent evidence because Husband’s expert did not reappraise the home after the hurricane, instead opining that while the hurricane caused some slow down, the value remained the same because of more people moving into the area and less available inventory. The trial court also found Wife’s expert was not a credible witness because he had been found not to have exercised due diligence in a appraisal by an appraisal governing body and had judgments against him that he blamed on his wife. Here, the Court of Appeals upheld the trial court’s valuation and distribution of the Florida property because questions of credibility are left to the discretion of the trial court and binding on appeal and the fact that Husband’s expert did not reappraise the property went to the weight, but not the sufficiency of the evidence.; Husband’s evidence was still competent evidence and “[a] trial court's findings of fact in an equitable distribution case are conclusive if supported by any competent evidence.” Lawrence 2026 N.C. App. LEXIS 54, *4 (quoting Edwards v. Edwards, 215 N.C. App. 549, 550(2017). Husband’s expert had considered the effect of the hurricane without reappraising the property. 

So, in this case, the Court of Appeals reversed the trial court’s denial of Wife’s Motion to Amend the ED Order, ordered the trial court to distribute the marital funds in the company bank account and if necessary to adjust the distributive award. The Court of Appeals upheld the trial court’s denial of Wife’s Motion to Amend the ED Order as to the value of the residence in Florida.