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Understanding Business Valuation in a Divorce

One of the most complicated and difficult issues in divorce proceedings involves the valuation and distribution of marital property. When there is a business involved or tied to the marriage, it can make the process even more involved and expensive. In many cases, the interest in the business is the most valuable asset of the marital estate.

It then becomes important to involve an experienced business valuation attorney who understands the process and the law to help sort through this process. There are different approaches to value a business, and often, valuation conclusions come back different from each other. The attorneys involved have the responsibility to argue for their clients and persuade the court in order to reach a fair division of the business.

Tangible and Intangible Assets

When determining the value of the business, its assets are typically broken down into tangible and intangible assets. Tangible assets include cash, inventory, equipment and accounts receivables. These are typically the physical assets. Non-physical assets such as trademarks, patents, copyrights, and contracts that grant rights and privileges are considered intangible assets.

Once they are sorted out, experts will attribute value to each of these assets based on specific standards and methods. There are some difference in the recognized valuation methods, which means that many times the value for assets will come back different from each other. Most often, the date of valuation is a key factor in the differences of value. Very rarely do two business valuation experts arrive at the exact same conclusion.

Determining an Outcome

In a divorce proceeding, both parties will typically engage his or her own business valuation expert who will present their opinion in a formal report. The experts will also testify in court or mediation. During their testimonies, the experts will explain how they arrived at their determination, including analysis and outside opinions. The judge is then left to decide which value to accept.

This is why it's crucial to have the right attorney representing you. Your attorney will be able to make strong arguments for your case while calling into question the information provided by the other party involved. Having an attorney with a business or finance background can be very beneficial.

Family law attorney Brad Crider has extensive experience in business valuation in divorce proceedings. His bachelor's degree in business administration has helped him lead his clients to successful outcomes in many divorce cases involving a business. Put his experience and aggressiveness to work for you. Give Crider Law a call today to set up an initial consultation.

Category: Divorce Law
Mesa
3850 E Baseline Rd Suite 111
Mesa, AZ 85206
local phone: (480) 378-9000