Key Factors for Business Valuations in a Divorce

The issue of property division is one of the most resource-demanding aspects of a divorce, especially when high-value assets are involved. In particular, divorce actions involving business interests will implicate complex legal and financial concepts that undoubtedly require specialists to evaluate the details of your entrepreneurial undertaking. This article delves into the essential aspects of valuing a business in a divorce.

Property Division Under Florida Law

The principles of “equitable distribution” govern property division for divorces in Florida. Under equitable distribution rules, marital property is distributed in a manner that is equitable to the parties, under the specific circumstances of each case. The term “equitable” does not necessarily indicate an equal division of assets. Instead, courts divide marital property in a way that is just and fair in light of the relevant facts of the divorce. However, Florida law highly favors an equal division of marital property, unless circumstances justify a deviation from an equal division.

When ownership interests for a business are involved in a divorce, courts must determine the parties’ interests based on principles of equitable distribution. Florida courts must decide if a business qualifies as marital property or nonmarital property.

Marital property includes assets acquired by either spouse during their marriage. Nonmarital property includes assets that were acquired before marriage or after divorce, in addition to assets acquired during marriage through inheritance. Significantly, the appreciation in the value of nonmarital assets due to efforts of either spouse during marriage will qualify as a marital asset.

Key Factors for Business Valuations

The classification of business interest during divorce is one of the most important assets to consider during property division proceedings. Businesses that are started during marriage are easily characterized as marital assets. However, businesses that are acquired or initiated before marriage are more complicated, especially if both spouses invest time and money to increase the business’ value.

The distribution of marital interests in businesses depend on the complexity of the business and its operations, considering the following factors:

• The use of marital assets to enhance the business’ value
• The value of tangible assets and capital
• The value of intangible assets such as business goodwill
• The value of business liabilities
• The book value of stock
• The fair market value of business stocks

Consult Dale L. Bernstein, Chartered Law Office for Quality Legal Advice

If you are going through a divorce involving valuable property and high-value assets, it is in your best interest to retain the professional services of an experienced attorney for legal representation. At Dale L. Bernstein, Chartered Law Office, our legal team is dedicated to protecting your property interests and legal rights during your divorce. Under the guidance of Attorney Dale L. Bernstein, we will work tenaciously to find a favorable resolution to your divorce issues.