Photo of Kenneth L. Gibson Jr.
Photo of Kenneth L. Gibson Jr.
Photo of Kenneth L. Gibson Jr.

Business valuation may prove vital during property division

On Behalf of | Apr 3, 2018 | blog | 0 comments

Knowing the value of your business or your spouse’s business can have many uses. In the event that the business needs selling or simply for projecting future revenue, understanding the company’s value and assets could hold great importance. On a more personal level, understanding business valuation may also prove useful in the event of divorce.

If you co-own a company with your spouse, the business will likely come under scrutiny when it comes time for property division during the divorce. Because you certainly do not want to lose out on your fair share, understanding the value of the business may help you determine to what you could be entitled.

How to address a business

Businesses can prove touchy and complicated to address during divorce. Company owners often view their business as closely as they view their children due to the hard work and effort put in to reach success. However, individuals typically utilize one of three options when the company is held jointly, which include:

  • One spouse buying out the other in order to solely maintain business operations
  • Selling the company entirely and splitting the proceeds between the divorcing parties
  • Both parties continuing to work alongside each other

The circumstances of your particular arrangement may impact the decision made.

Determining business value

When selling a business or working on an owner buyout, business valuation is important. In order to determine the actual value of a business, enlisting the assistance of a professional valuator could prove wise. Individuals who could act in this role include business brokers, financial analysts, business appraisers and certified public accountants.

Before choosing, you may also want to keep in mind that the future earnings of the business could impact property division. If projections indicate that the business may thrive considerably, that information may help during your negotiations. Therefore, you may want to choose a professional who understands how to estimate future earning potential.

Getting your own answers

Even if your spouse indicates that he or she will have the business valuation conducted, you may also want to obtain a valuation of your own. In hopes of you obtaining less than your fair share, your spouse could provide incorrect valuation information. Therefore, having your own results to work with may help avoid potential pitfalls.

Dividing business assets is no easy task. A minor mistake or oversight during property division could leave you missing out on a considerable amount of money. If you want to better understand your options during this part of the divorce proceedings, you may wish to gain information from local Kentucky legal resources.


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Photo of Kenneth L. Gibson Jr.