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What is a business valuation and why do I need one in my divorce?

On Behalf of | Oct 21, 2022 | High-asset Divorce |

If you and your spouse are divorcing and you share a business, you may have concerns about how you will get your fair share of the asset in a divorce.

A business valuation is a tool that can help you and your future ex divide your business. Here is what you need to know about the process.

What is a business valuation?

A business valuation is, just as it sounds, a way to value your business. In a valuation, an expert looks at various factors, such as location, income and growth potential, debts, assets and liabilities, to determine the value of the business. There are a couple of options regarding who completes the analysis. Arguably, the least contentious and most affordable method of obtaining value is for you and your partner to jointly hire a third-party forensic accountant. Alternatively, you and your spouse can each hire a forensic accountant and compare the findings, which may lead to more disagreements and higher costs.

How will a valuation benefit me in my divorce?

Without a proper business valuation, the amount of value you have in your business is merely conjecture, leading to disagreements that draw out the divorce and cost you more time and money. This also leaves holes for dishonesty to prevent you or your spouse from getting a fair share of the business. Obtaining a business valuation can lead to a smoother, more efficient divorce.

A business valuation can reduce or eliminate the elements that may cost you more money and your peace of mind.

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