Premier Legal Advocates For Your Family

The role of business valuation in your divorce

On Behalf of | Jul 4, 2022 | Divorce |

When it comes to asset division during a divorce, both parties just want their fair share. If you are a business owner, you have the additional priority of protecting your enterprise, and a business valuation can help accomplish both goals.

Determining the fate of a business as marital property is a sensitive issue when resolving your divorce case. Understanding the role of a business valuation will help you bring the matter to a smooth and amicable conclusion.

Understanding the importance of business valuation

During a professional business valuation, a forensic accountant will typically analyze the company’s assets, real estate and any other factors which contribute to its overall value. Having an accurate valuation is essential for splitting business-related assets fairly. You and your spouse can agree upon a joint forensic accountant, or you can each hire your own professional to mitigate the risk of miscalculations. Be aware that in a hostile divorce, your spouse might attempt to misvalue parts of the business, which can lead to further conflict and court time.

Protecting your business after a valuation

Once the exact value of the business is indisputable, you can take steps to protect your best interests. If you wish to keep your company intact, you can buy out your spouse’s share in accordance with the professionally-calculated value. Alternatively, you might decide to simply liquidate the business and split the finances.

Without a proper business valuation, you might be selling yourself short when it comes time to divide marital assets in a divorce. Understanding your company’s true worth is essential for continuing operations as usual once the dust clears.