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The answer to this question is simple if you sell the horse privately or at auction. The purchase price or top bid is the value of the horse. However, what is the value of the horse in a divorce, partnership or business breakup, insurance claim, motor vehicle accident or secured transaction for a loan or buyout?
I recently represented a spouse in a very difficult divorce where the value of a number of horses was the biggest point of contention. I also remember a partnership dissolution where the investors owned a number of horses and the one partner wanted to buy out the other. The difference of opinion in the value of the horses was staggering. (Surprise, Surprise!)
In a situation where value is not agreed upon, an appraiser will need to be retained to provide a value and written report. The selection of an appraiser is critical. The appraiser must be well informed of the breed in question, including pedigrees, and must be knowledgeable about market prices including private sales and auctions. In the case of a stallion or mare, the appraiser must be well informed about breeding and bloodlines.
Fortunately, or unfortunately, as the case may be, there is no certification process for an appraiser specializing in draft horses. There are organizations which do offer an equine appraiser certificate which is a general certificate for all horses. For example, the American Society of Equine Appraisers offers a course and certification process for equines in general. Expertise in draft appraisal is basically by word of mouth. Auctioneers and breeders represent a gold mine of knowledge when it comes to values and should not be overlooked when picking an appraiser.
The appraiser must prepare a curriculum vitae [CV] or resume for legal matters. The CV or resume must describe the appraiser's experience. It should start with the number of years the appraiser has been in the horse industry, especially with the breed in question. The CV or resume should then describe how the expert is familiar with market values, i.e., auctioneer, horse breeder, horse salesman, etc. and should also describe transactions the appraiser has been involved in which are similar to the matter at hand.
Once the appraiser has satisfied the requisite knowledge and experience requirements to qualify as an expert, he or she must go about the task of actually appraising the horse. The horse owner can be an invaluable source in helping the appraiser. The owner should provide the appraiser with a great deal of information concerning the horse.
Let's begin with the basics, name, age, breed and registration if applicable, must be provided. The height and weight of the horse is also required along with the color and markings. Simple enough so far, but the owner should also provide photographs and/or video clips, if available, and also show the appraiser the horse in flesh if the animal is not deceased.
If the horse is a mare or stallion, breeding records should be supplied including the number of foals, average purchase price of foals, stud fees and show or breeding records of foals, if known. The horse should also be described as a pleasure horse, carriage horse, work horse and/or show horse depending on its use. If the horse is a show horse, its show record and major accomplishments, should be mentioned as this will increase the value of the animal.
When considering value, veterinary records are crucial and can be referenced. X-rays and radiographic studies, if available, should be reviewed to confirm or eliminate certain conditions which cause lameness. In the case of a stallion, a semen analysis should be performed. If the horse is deceased, a copy of the necropsy should be obtained and reviewed. All of these things can be crucial information in considering the value of a horse.
Once the appraiser has received all the relevant information, including a review of the veterinary records, and inspected the horse for conformation, soundness, etc., the appraiser is ready to look for comparable sales and set his opinion in a written report. Comparative sales should not be overlooked. Comparative sales are important for providing a basis or a reference point for the valuation of the horse in question.
I have developed a system for appraisers to help them in their analysis and will set forth the information I am looking for and that I want an appraiser to address for legal purposes. I also request that the appraisal report have attachments or exhibits which should include such things as registration certificates, photos, show records, breeding records, a current veterinary heath certificate and even vet records if possible.
I like an appraisal report to begin with the name, age and sex of the horse. The report should then reference the breed and registration certificate if applicable, referring to the registration certificate as an exhibit attached to the appraisal. The size and color of the horse should be described along with conformation points and what the horse was used for. The pedigree should be discussed along with noteworthy siblings, dam and sire, if applicable.
If pictures and/or videos are available, they should also be referenced along with any noteworthy accomplishments. If the horse is a stallion or mare, stud fees, number of breedings, number of foals, average price per foal and any noteworthy offspring should be mentioned. Blood typing/DNA may be applicable along with an opinion as to soundness for breeding and/or performing.
Now that all of the background research is done, it is time for the appraiser to arrive at his/her opinion of the fair market value of the horse. The written report should opine as to the fair market value of the horse "to a reasonable degree of draft horse appraisal certainty."
Horse appraisals are more of an art than a science. A bit of subjectiveness may be involved as two qualified appraisers could easily reach a significant difference in opinion. The key factor is to pick a well-qualified appraiser who will do a complete and thorough analysis. The chances of having the appraiser's value upheld in a litigation matter is far greater when the appraiser does a complete history, examination and comparable analysis to determine the value of the horse. Though not an exact science, appraisals can be quite accurate if performed correctly and quite valuable in legal situations where the value of the horse is in question.
Enough legal talk - it’s time to hitch horses!
Ken is a practicing attorney in Myerstown, Pennsylvania, where a good bit of his practice involves negligence cases. Ken and his wife, Karen, own Sunny Hill Farm Belgians, and they have been exhibiting their six horse hitch for the past few years at most major shows in the east.