When parties get divorced, their marital property and debt have to be divided. In states where equitable division is the law (which is the vast majority of states), this requires that marital property and debt be divided in a just manner, considering all the factors.

In many cases, the value of the marital property and debt can be a real issue.  After all, if you don’t know what marital property and debt are worth, how can you divide them justly?  This is particularly true the more marital property and debt that exists.

Problems with a Business in Divorce

One marital asset that can substantially increase the complexity of divorce is where the parties own a business. In some divorces, a business can be one of the most significant assets owned by the parties.  In many cases, the parties may have invested considerable time, money, effort, and labor into growing the business.

Then, when a divorce occurs, there are all kinds of problems.  For example:

1.) What is the business worth? This is a critical question in divorces and is often hard to value.  Ultimately, the business’s fair market value will probably need to be examined unless the parties stipulate a value. But this can be easier said than done.

2.) If both parties take part in the business itself, will they have to examine whether they can continue operating it together? Or they may have to consider whether one of the parties would be better off selling their interest.

These are just a couple of issues that can come into play when the parties own a business and are getting divorced. There are many other issues as well, including, but not limited to, whether goodwill is attached to the business, whether an individual owns a majority or minority interest in a business, or whether there is a key person relative to the business.

Vital to Enlist a Business Evaluator

For these reasons, it is vital in many cases to enlist the help of a business evaluator in a divorce to ensure a proper valuation is obtained. It is also important to begin this process early in a divorce case to ensure that parties can engage in meaningful settlement negotiations or be prepared for trial.

If you are going through a divorce and own a business, Stange Law Firm, PC can help.  You can contact us at 1-855-805-0595.