3 steps to valuing your business during divorce

Aug 31 2017 - Posted by , in Business Assets, Divorce, Property Division, Tagged in Business Assets, business valuation, Divorce

If you own a family business and know divorce is in the near future, you might be wondering what is going to happen to the company. The personal challenges for your emotions and finances are already enough to cause inner turmoil, so what should you do about the business? The most important step to take is getting a business valuation.

An accurate picture of the family business and its assets will make the property division process go smoother. Here are some important things to keep in mind as you value your business.

1. Find an appraiser

First, you have to find the right person to determine the value of your business. You might look for a:

  • Financial analyst
  • Certified public accountant
  • Business appraiser
  • Business broker

The exact person you choose will depend on your preferences and the advice of your attorney. Typically, a professional business appraiser is the right choice.

2. Know the options for determining value

There are various ways to value a business. The standard varies widely, and you should be involved in choosing the right one. Have discussions with the valuation expert and your attorney. Make sure you understand what investment value, fair market value and intrinsic value all mean.

3. Decide what to do with the business

After you have a clear picture of the worth of the family business, it is time to decide what to do with it. You and your spouse could continue to run the company together, but this is difficult even in the most amicable situations. You could also decide to sell the business and split the proceeds. Perhaps you want to buy-out your spouse’s half of the business.

Dividing business assets and figuring out what to do with the company after your divorce can seem mind boggling, but you can find a solution when you have the right financial and legal professionals helping you.

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