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Methods of calculating business value in a divorce

On Behalf of | Sep 1, 2016 | Divorce

An Arizona couple who is ending their marriage must divide their property, and if a business is involved, the process may be more complicated. They will first need to know the value of the business. An appraiser can perform either a full valuation or a calculation of value depending on the situation.

A calculation of value is often sufficient at the start of a divorce or if the couple is cooperative with one another. Couples may also choose this option if they want the divorce over more quickly. A calculation of value is quicker and less expensive than a full valuation although it is also not as precise.

Arbitrators and judges might need the more accurate full valuation. If the business is a complex one or the divorce is contentious, a full valuation might also be necessary. However, couples should keep in mind that this could be expensive and might drag out the divorce process.

There may be a number of factors that affect how a business is divided. Both parties might need to compromise. For example, the business owner might feel that the other spouse does not have a claim on it at all because they did not work or invest in it. However, the other spouse might point out that building the business would not have been possible without their support. This might include being the breadwinner at times or taking care of children and household affairs so that the owner could spend more time working. That spouse might want a permanent share in the business. A compromise might be that the owner has to pay spousal support for a certain period. The couple’s respective family law attorneys could assist in negotiating an agreement that addresses these types of issues.