Determining The Value Of A Business For Divorcing Business Owners
Business ownership can add a layer of complexity to any divorce. In most cases, the value of a business owned by a divorcing spouse will be included as marital property in the divorce.
At the Teller Law Firm, P.C., in Grapevine, our experienced divorce lawyers can provide legal guidance and advice regarding the value of a business for your divorce and whether or not it needs to be included among your shared marital assets.
Understanding If A Business Is Community Property
If you started or purchased the business during your marriage, it’s likely to be classified as community property. This means both spouses have a claim to its value. However, if you owned the business before marriage, it might be separate property.
But be aware that any increase in the business’s value during the marriage could still be subject to division. The classification can get especially complicated if you used marital funds to grow a preexisting business or if your spouse contributed significantly to its success. A business in a divorce can be a complicated asset to divide. However, our divorce lawyers have more than 30 years of experience helping families resolve the complex issues in their divorce.
How Is The Value Of A Business Determined In Texas?
The valuation of a business is more than just knowing how much money a business makes. It also includes how much value the entity possesses as an asset. Often a business’s value can offset the value of a divorcing couple’s home. Additionally, if a spouse has a business partner, that can further complicate the appraisal process.
Determining the value of a spouse’s business in a Texas divorce involves a thorough analysis of various factors. We often work with financial professionals to conduct a comprehensive business valuation, including a forensic accountant if necessary. This process typically includes examining financial statements, tax returns and cash flow projections. The valuation expert will also consider the business’s assets, liabilities and overall market conditions. In particular, we also want to make sure that the business is not being used to hide marital assets.
How Is A Business Divided In A Divorce?
When a business is considered community property in Texas, its division becomes a crucial part of the divorce settlement. However, “division” doesn’t necessarily mean physically splitting the business. Instead, we will focus on creating an equitable distribution of its value in your divorce. Some of the options for dividing a business in divorce include:
- Buy-out: The spouse who owns the business can buy-out the share of the other spouse. We can help make sure the valuation is fair, and work out a payment plan if necessary.
- Co-ownership: The spouses continue to own and operate the business together, even after their divorce. We can help you draft clear agreements to prevent future conflicts.
- Sell and split: The business is sold, and the proceeds are divided between both spouses. We can guide you through this process to maximize the value of your business.
Deciding what to do with the business will depend on your financial situation, your ability to work together and your future goals. At the Teller Law Firm, our experienced property division lawyers will help you weigh your options and negotiate a fair settlement.
Consult A Grapevine Business Valuation Attorney
Our Grapevine business valuation attorneys have the experience required to handle even the most complex cases. We will meticulously review bank statements, tax returns and other documentation in order to properly assess the value of your business in your divorce.
To schedule an initial consultation to ask questions, you can contact us at 817-612-4298 or send us a message through our online form. We promptly respond to all messages.