Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

COMPASSION, KNOWLEDGE AND
Experience You
Can Rely On
  1. Home
  2.  » 
  3. High-asset Divorce
  4.  » Valuing business interests in a complex divorce

Valuing business interests in a complex divorce

| Mar 23, 2021 | High-asset Divorce |

If you are a Colorado business owner and divorce is looming, you may worry about losing your company in the settlement. However, that stereotype often doesn’t fit the reality of today’s divorce proceedings. Many factors affect how the court views the distribution of property. “Equitable division” rarely means equal.

According to the American Bar Association, non-marital property includes assets you and your partner each brought to your relationship. If one of you had a significant amount more of these assets when you married, the court might award more marital property to the less wealthy spouse.

Marital or separate property

As part of the divorce, you must both identify and value assets before determining a settlement. Whether the court considers your company marital property depends on the following factors:

  •         The founding or acquisition occurred after the marriage date
  •         The extent of financial and personal contributions by each of you
  •         The funding source used for purchasing or starting the business

If your company meets the requirements for marital property, it doesn’t matter if both names are on the documents regarding the formation or acquisition of the entity.

Establish the value

A business is often the most valuable property involved in the divorce settlement. An official business valuation by an unbiased third party can determine its worth. If you or your partner feel taken advantage of, it can make a tense situation hostile. Delivering it to you and your spouse at the same time can minimize the anxiety and mistrust related to its value.

By negotiating from the same starting point, you can reduce the length of the proceedings and increase the likelihood of reaching an amicable settlement. It may include one of you buying the other out of their share of the business or continuing to work together, minimizing the impact of your divorce on your company.