How to get a proper business valuation during divorce

| May 3, 2021 | High-asset Divorce |

Property division can be one of the biggest obstacles to overcome in a divorce. Things become more challenging if one or both spouses are business owners. Dividing assets that also include businesses often require an accurate valuation of the businesses before negotiations begin. If you are looking to get a fair appraisal for your business, here are some tips you should keep in mind:

Make sure to look back far enough

When you are looking at the history of a company during the valuation process, it is important to review as much of the relevant information as possible. Looking back through a company’s history for at least five years is typically enough to secure your best interests in your divorce.

Choose the right valuation methodology

There are several different methods of appraising the value of a business, including market value, income-based, and asset-based valuations. Not all valuation methods will provide you with an accurate reflection of your company. For example, suppose the company in question is a privately owned business. In that case, a market value approach may not be right for you because these approaches often compare companies to public companies.

Keep your valuation current

Sometimes, a divorce can take years to finally resolve. During the time it takes to settle things, your business valuation may not be as accurate as it was when you created it. If a considerable amount of time has passed since you originally received your business valuation, make sure that you update it to get an accurate reflection of any businesses that are involved with your property division.

Get an attorney’s help

If your spouse tells you that they would prefer to settle things without an attorney to keep things simple, you should still have a lawyer you can trust at your side. An experienced divorce attorney can help you ensure that you are not making critical mistakes in your divorce and that you are taking every precaution necessary to secure the best possible outcome in your divorce.