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Handling complex divorce and family law cases in the Tampa Bay Area, including, Clearwater, St. Petersburg, Tampa, and New Port Richey
Handling complex divorce and family law cases in the Tampa Bay Area, including, Clearwater, St. Petersburg, Tampa, and New Port Richey

When your divorce includes a business

On Behalf of | Oct 13, 2021 | Divorce |

Understanding the value of a business during a divorce helps you to bargain for your fair share. Spouses who run a business together have an asset that’s considered community property. Community property covers all the things you gained during marriage. Dividing shared business assets up in Florida calls for a few questions to be answered.

How much is the business worth?

During a divorce, valuing a business is not as easy as simply adding its assets together. One spouse, in an attempt to own the business, might buy the other spouse out, but that price is likely to be exaggerated. To inflate their valuation, business owners might even commit forgery in order to retain a larger business share. This is why a fair market price is first necessary. Fair market pricing helps both spouses to avoid valuing their business emotionally.

As for appraisers, an investment banker is an option you have. Likewise, a professional business appraiser is qualified to give you an accurate valuation. That valuation is necessary before you and your spouse can bring your divorce to court. Just keep in mind that every business industry is different, so there’s no one-size-fits-all formula for valuation. It takes time and will require you to produce documents, receipts or bank statements.

Is there inequitable participation?

Legally, two people can own one business although only one person actually does the work. In these cases, spouses who put tremendous effort into a business can seek a higher share of their business. This is especially true when this spouse has proof of the hours, money and energy they’ve invested. During a divorce, the inequitable participation of one spouse is oftentimes accounted for if their business gets sold.

The benefits of an accurate valuation

Experience shows that an amicable settlement during a divorce is more likely when any business involved is first valued. Both spouses might even learn new things about the business. The information they receive often eliminates unfair claims, leaving both parties to come to a reasonable agreement.