Determining Business Valuation In Divorce

At Biviano Law Firm, we represent business owners in divorce and property division issues. If it is determined that an interest in a business or group of businesses are to be divided in a divorce before a business can be divided in a divorce case, the value of the business interests must be determined, which requires that an appraisal must be performed. Each spouse's contribution to the business must also be considered before it is divided as well as the timing of the ownership to determine if that ownership interest was part of the assets of any particular party before the marriage took place. This requires a detailed tracing of the assets resulting in the need for the party to have possession of evidence that will prove the presence of those assets.

What Is A Business Worth?

If the value of the business increased during the marriage, this increase in value may be considered marital property. In order to determine the value of an interest in one or more businesses or a professional practice, the parties must provide the court with a report and testimony from an expert in the field of business valuation. The expert, who is generally selected with assistance of the attorney and hired by the client, works closely with the attorney and client in developing the needed tracing and in presenting the case so that the business receives a fair valuation.

To accurately appraise a business, underlying records and documents are needed. Essentially, a business valuator takes an historical look at a business to determine its value at the date of marriage, and its value at the date of divorce. Marital and separate property issues and the effect of a premarital agreement are also matters to be considered.

Methods Of Business Asset Division

There are several methods available for a court to divide a business asset:

  • The business can be sold and the proceeds equitably divided.
  • One party can be awarded sufficient assets that would compensate for the other party being awarded all interests in the business. This generally happens if there are other significant assets that were acquired during the marriage.
  • The court can order one party to buy out the other party's interest in the business through either refinancing or a secured payment plan.

Contact Us
Call 330-392-5000 or contact us online or to speak to attorney Biviano to determine the value of your business interests in a divorce.