Dallas Family Business And Divorce
In situations where the valuation of a business is a significant asset in a divorce, great care must be taken. It is not unusual to have opposing business valuations differ by several million dollars.
At the law firm of Lisa E. McKnight, P.C., in Dallas, Texas, we have an in-depth understanding of valuation methods, accounting and financing. We understand the subtle nuances that can alter a valuation to favor one party or the other in a divorce.
The valuation standard is “fair market value,” which can become clouded by the emotions and financial goals of the parties involved in a divorce action. Professional business valuations are cost-effective and most often essential as part of divorce proceedings. We work closely with business and real estate appraisers who help us understand and interpret financial records, balance sheets and appraisals.
Protect your business before divorce. Some entrepreneurs protect their business by drawing up a prenuptial agreement that separates the business from marital property in the event of a divorce. We are happy to explain all of the safeguards that a prenuptial or postnuptial agreement can provide.
A Dallas Attorney Experienced In Business Valuation
Often, the debt of a business entity can be more important than the intrinsic value of the business. If one spouse owns a business and has pledged marital assets as security for debt, the other spouse should be careful to determine the total amount of debt and protect against being held liable for those debts.
In Texas, if you are running a family business, you have a fiduciary duty to your spouse to run the business according to best practices and as profitably as can reasonably be expected. This means you cannot try to pad losses in a year running up to your divorce.
Some professionals are not outright business owners, but do own shares in a partnership. Many physicians, for example, have ownership stake in the clinic they work at or have been invited to purchase “shares” of a for-profit hospital at which they treat patients. These shares can increase significantly in value, and a spouse needs to know about those shares in order to receive a fare division of property.
If you have questions regarding how your family-owned business might fare in the divorce, we can help. Call 214-528-4191 or use our contact form to send us your inquiry. We offer a 30-minute telephone consultation for $75 in which we can review the facts of your case, provide a straightforward assessment and recommend the best steps to take next.