Ever hear of a quick, fair, and even-handed divorce? Me neither! Divorces by their very nature tend to be emotionally charged and contentious. The conflicts that ended the marriage quite often continue to simmer, resulting in a lengthy battle over what constitutes a fair settlement. If you own a business, the value of your company will need to be considered in the matrimonial proceedings and may well be your most valuable asset.
A reputable, highly-qualified, and impartial business valuation expert can provide an accurate assessment of your company’s value, both at the time of your marriage and at the time of your divorce, which may aid or even expedite a fair and reasonable settlement.
How Are Business Assets Split In A Divorce?
Regardless of whether you’re a shareholder of your business or the sole owner/operator, the value of your interest in the business will be included in the net family property to be divided between you and your spouse. This does not mean that your ex-spouse will receive 50% of your interest in the business, but it does mean that you will need to share the value of the business with him or her. More specifically, if you owned your business prior to the date of your marriage, then your legal obligation in Ontario is to share 50% of the increase in value of the business between the date of marriage and the date of separation.
To accurately determine the value to which the ex-spouse is entitled, a business valuation must be prepared at both the date of the marriage and the date of separation.
Divorce and Litigation Support
Business valuation conclusions are complex analyses which are dependent on the approach and assumption adopted by the valuator. These analyses are further complicated where financial information at the date of marriage is either sparse or no longer available. Consequently, spouses may conclude differently as to the appropriate value that is to be shared.
If the couple cannot reach an agreement on the value of the business, the matter will often proceed to court. In such cases, a business valuation expert will be required to prepare an independent expert’s valuation report and provide expert testimony to the court. In addition, such expert will assist your counsel in understanding the key financial aspects of your case, and assist with the preparation of cross-examination questions to be put to the opposing expert.
A Reputation for Reliability, Accuracy, and Exceptional Service
At Fuller Landau, we pride ourselves on our long-standing reputation for the quality, reliability, and timeliness of our expert valuation reports. To ensure that your business interests are protected during a divorce settlement, contact us today.