Washington Business Valuation Lawyer
According to a recent survey, approximately 30 percent of Americans reported that they have started at least one small business at some point in their lives. An additional 31 percent of Americans reported they have thought about starting a business at some point. Today, approximately 40 percent of all marriages in the United States end in divorce.
With the high rate of divorce and the number of small businesses in the country, business valuation is important to many people. Below, our Washington business valuation lawyer explains what may happen to your company during divorce.
What is Business Valuation?
A business valuation is the process of determining the estimated value of a small business. A small business’ value and strength relies on its ability to create profit, both today and in the future, as well as its strengths that make it unique. Having a clear understanding of a business’ value is critical when going through a divorce.
Challenges with Small Business in Divorce
In litigated divorces, the spouse who operates the business may try to withhold financial information regarding the business from the other side. For example, they may exaggerate a downturn in business in the hopes that their spouse will agree to a smaller share of the business value. On the other hand, the spouse who does not operate the business may not know the true value of the business and its ability to make a profit. They may then insist that they receive a share of the business that is unreasonably large for the value of the business.
Clearly, small family businesses can easily become a contentious subject during divorce. It is often recommended that families hire an independent person to value a business.
The Importance of an Accurate Business Valuation in Divorce
Spouses do not always know what will happen to a business during divorce. For example, if one spouse was responsible for operating the business, are they entitled to a larger share of it in divorce? What happens if one spouse started a business before they got married? Do they have a right to keep it if the marriage ends?
The truth of the matter is that even when a business was started prior to a marriage, at least a portion of it is still classified as marital property. This is partly because the profits from the business likely contributed to the household, such as paying the mortgage, utilities, or groceries. Additionally, any value in the business that occurred after the marriage is also considered marital property.
To properly determine how much of the business each spouse is entitled to during divorce, a proper business valuation is essential.
Our Business Valuation Lawyer in Washington Can Advise On Your Case
At Bunde & Roberts, P.C., our Washington business valuation lawyer can help you properly value your family’s company so each spouse receives their fair share. We can also advise on other options available, such as negotiating an agreement that includes other marital property when one spouse does not want to part with any portion of the business. Call us now at 412-391-4330 or chat with us online to schedule a consultation and to learn more about your legal options.
