Valuing Your Business For Divorce Purposes


Valuing Your Business For Divorce Purposes

business valuation divorce

If you own a business, the chances are that it will need to undergo some type of formal valuation process in order to reach a fair market value for property division as part of your divorce. A

family lawyer in San Diego like those at the Men’s Legal Center may be able to help you secure the services of an appraiser who can give you a fair value for your business so that your assets can be divided equitably. These divorce attorneys for men can also help you through the entire process of property division, even when it is complicated.


Business Can Complicate Divorce


Owning your own business can complicate a divorce process, because it is likely that you want to keep the business operating in order to continue making income. In some cases it makes sense to shut a business down, but in other cases it is your only source of income. Therefore, it is very important to protect yourself throughout this process and ensure that your business is valued fairly.


There are several ways to divide a family-owned business in a divorce, including a buy-out. One of the most common methods of dividing property is the buy-out in which one partner pays the other for his or her interest in the business. This is particularly appropriate if the business has formerly been run by both spouses and now one will be leaving.


California law demands that a property valuation must be reasonable in order for a judge to agree to the division. It is important that you have not only a knowledgeable child support lawyer in San Diego but also one who is familiar with business valuations to determine if your settlement agreement will be acceptable to the court.


A sales valuation must include fixed assets of the business, such as buildings, furniture, equipment and inventory; works-in-progress, such as large contracts or jobs that must still be completed; accounts payable and receivable; taxes; collection costs; and goodwill and other intangible items.


What Types Of Valuations Are Allowed?


California courts allow both fair market value (or FMV) valuation and investment valuation. While FMV is more straightforward, an investment valuation may be more appropriate if the business was owned by the husband prior to his marriage that involves other family members, for example.


If you are seeking divorce, it is important for you to be aware that any business valuation may change the financial landscape of your settlement. The attorneys at the Men’s Legal Center are here to help you understand and deal with the reality of divorcing while owning a business.

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