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Protecting Your Rights In Family Matters

How a business valuation affects asset division during divorce

On Behalf of | Nov 2, 2022 | Divorce

One of the most contentious aspects of any divorce is the division of marital assets. It is not likely to be a straightforward process, especially if you or your spouse are business owners.

In most cases, part or all of a privately-owned business is marital property subject to equitable distribution in the divorce process. Splitting apart a business is not an easy thing to do, which is why you should understand the role of a business valuation.

Why you need a business valuation

Business valuation is the process by which an unbiased financial professional takes stock of a business and all of its assets to determine its true economic value. Knowing this value makes it possible for you and the court to factor the business into your asset allocation strategy for the divorce. Keep in mind that you should always obtain your own valuation for the sake of impartiality, even if your spouse is the business owner and already has a recent valuation.

Getting your fair share of the business

If you are a business owner you likely want to keep your company intact. Even if your spouse is the owner, you still deserve an equitable share of assets. Either way, accurate and impartial business valuations serve as important negotiation tools that empower both parties to advocate for their priorities.

Many judges will order a business valuation during court-regulated divorce proceedings so that they can arrive at a fair decision regarding asset division. However, you should also conduct a business valuation if you decide to settle your divorce outside of court through mediation.

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