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Property Division Frequently Asked Questions: Business Interests

  1. How will the court deal with dividing my husband’s business?As with other items of property in a divorce, businesses are also considered assets subject to division. Contrary to common belief, there is more to determining the value of a business than just calculating the assets and liabilities. Rather, in a divorce case, generally, businesses will be valued through the assistance of an expert, usually an accountant with training in business valuations.Beyond looking at just the assets and debts of the business, the valuator will also analyze the income stream for purposes of arriving at additional value, generally related to “goodwill.” It is not uncommon for each side in a divorce case to have his or her own business valuator, though sometimes the parties initially use one joint expert. Of course, other rules applicable to the division of property in a divorce apply, such as whether part or all of the business was pre-marital.

    Assuming there is marital value to the business, the court can either offset the other party’s share with other marital property, arrive at a figure owed by the party keeping the business in terms of what he or she needs to pay the other, or order the business sold. Parties to a divorce should keep in mind that the valuation is not just a simple balance sheet. Parties should also keep in mind that in this economy, our attorneys see once thriving business now heavily laden with debt and diminishing income streams. The Denver family law lawyers at Plog & Stein, P.C. can help you further analyze the ins-and-outs of your business assets and whether a valuation is needed or worthwhile in your divorce case.

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