Determining the value of a business during a divorce

On behalf of Stange Law Firm, PC posted in divorce on Wednesday, September 7, 2016.

When divorcing Missouri couples are determining how they want to divide their assets, they will also have to figure what is best for any businesses that were started during the course of the marriage. Before the assets can be properly divided, however, the value of the business must first be determined.

In general, there are two different analyses that can be done to determine the value of a business. A full valuation is the actual monetary value of the business. This analysis is important if a third party, like an arbitrator or a judge, is going to be using the result to divide up assets and property. While a full valuation does offer greater reliability, there are a few downsides. The service can be expensive and can take more time to complete.

If the former couple is willing to work together and has decided to go through a mediator for their divorce, a calculation of value may be a better option. While this calculation is less reliable, it does allow the former couple to negotiate and compromise without creating feelings of mistrust or even resentment further down the line.

A high asset divorce can be stressful if not difficult. If one person owns a business, the couple’s respective family law attorneys may recommend a valuation specialist who can give an accurate estimate of the company. If the couple decides that they can compromise, the attorneys may determine whether a calculation of value will suffice or if the business is complex enough to require a full valuation. Depending on the situation and other assets available, the former couple may negotiate so that one person remains in control of the business while the other person is granted the family home or other assets.

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