Splitting Up Without Losing Out
A Professional Valuation Is Key?

As a business owner, you already understand the importance of business valuations. Knowing proper values for your business assets smoothes transitions, sales and liquidations. Unfortunately, many business owners neglect to obtain a professional valuation when preparing to divorce their spouses.

Because emotions are typically negative - anxiety, anger and mistrust - one spouse may suspect that the other is hiding or undervaluing significant assets in an attempt to keep them out of the divorce settlement. This suspicion often arises when a family-owned business is at stake.

Divorce is never easy. But, as a business owner involved in a divorce, you can take steps to make the marriage dissolution as painless as possible. The first step is consulting a reliable, impartial, experienced valuator. The next step is preparing and educating yourself about the ins and outs of valuing assets for divorce purposes.

Key Points of Divorce-Related Valuations
Keep in mind that each state has its own laws and legal precedents in divorce cases. Your valuator should understand how these laws affect the valuation process, but consulting an attorney is also essential. Beyond state law and precedent, other characteristics differentiate divorce-related business valuations from others. Let's take a closer look at these points and their implications for the valuation of your business.

Marital property: This is property you acquired during your marriage, regardless of how title is held. But marital property usually excludes property you or your spouse acquired before the marriage or through gift or inheritance during the marriage.

Equitable Distribution: This assumes joint and equal ownership of marital property acquired while you were married.

The valuation date. This can be: 1) the date of separation, 2) the date of the divorce filing or 3) the date of the divorce. Make sure that the valuation date is fixed at the start of the valuation engagement. Otherwise, date discrepancies may invalidate the valuation.

The standard of value. The standard of value can be a minefield. One unique aspect of finding value for a divorce settlement is that the valuator is typically not seeking the business's investment value. Because the business usually isn't going to be sold, its value to a specific buyer isn't particularly relevant. Although many of the considerations are the same as for the determining sale value, some substantial differences exist. As with the valuation date, all parties should agree on the standard of value at the start of the process. In Florida personal goodwill is not a Marital asset.