What happens to your business in a divorce? Can business advisory services help?
If you own your business and are either considering marriage or facing divorce, it is important to understand exactly how a divorce can impact the value of your business asset.
The business advisory services team at Fuller Landau can ensure that you have a snapshot of your business value prior to entering into a marriage, and provide the information you need to assist with a fair settlement in the event of a divorce.
Business, Marriage, and Divorce
Unless otherwise stated in a prenuptial agreement, a business requires valuation at both the date of marriage and at the date of separation.
If the business pre-dates the marriage, the value of the business at the date of marriage is deducted, resulting in the inclusion of only the growth of the asset, from the date of marriage to the date of separation. In addition, the income taxes relating to the eventual disposition of the business are considered at each date. For this reason, it is advisable to have a business valuation conducted at the time of marriage.
A Reliable Business Valuation Contributes to a Fair Divorce
When a divorce occurs, the onus rests upon the business owner to provide valuations of the business at the dates of marriage and separation. If the initial valuation seems unreasonable to the other party, he/she can conduct their own valuation to help move towards a fair settlement.
If there is a material difference between the valuations and the parties are unable to settle, valuators can be called into court to testify on the method used in their valuation of the business, and to support their analysis and calculations. Of course, the reputation and experience of the business valuator are of utmost importance.
If you’re a business owner whose marital status is about to change through marriage, separation, or divorce, make sure that your business interests are protected, and that your union or dissolution is fair. Contact us today for a complimentary consultation.
Fuller Landau has a first-rate reputation for independent, objective, and well-reasoned valuations, and has extensive experience in expert witness court testimony.