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Valuating a business for property division purposes

On Behalf of | Sep 6, 2016 | Firm News

Whether a divorcing couple has one car and a checking account or valuable real estate and stocks, property division is a part of every divorce case. One asset that can be particularly difficult to divide during a Texas divorce is a business. Before property division negotiations can even begin, divorcing spouses who own a business must determine how much the enterprise is worth.

A professional valuation analyst will often be needed to determine a business’ value during the property division process. A valuation analyst can perform a simple calculation of value or a more detailed full valuation. While a calculation of value is quicker and less expensive than a full valuation, a full valuation is much more reliable.

If divorcing spouses are on relatively good terms with each other and are able to reach property division agreements in mediation, a full valuation may not be necessary to determine the value of a business. A full valuation is usually only necessary if a third party like a judge will be assessing the marital assets in order to make a ruling about property division. Even if spouses can compromise with each other on the divorce settlement, a full valuation may be necessary for a business that is very complex.

Every divorce case is different, so deciding whether to do a calculation of value or a full valuation for a business will depend on the situation. If property division negotiations are not going well, a divorcing spouse who gets a calculation of value for their business may have to get a full valuation later on. An attorney may be able to represent a divorcing spouse in negotiations about the division of a business.