Marital estates are the sum total of everything you and your spouse have built over the course of your marriage. That includes tricky assets like a partnership interest in your wife’s real estate company or your husband’s successful blog and Etsy shop.
The key with these assets is not just to think of them as sources of income, but to recognize that you and your spouse have created a cash value in the business. Even companies with modest profits can be worth seven figures, if their gross sales are high.
Coming to a fair valuation of a small business involves a number of complex steps, and the guidance of an attorney who can combine experience in buying, selling, and evaluating small businesses and divorce law is essential to getting the best result. These steps include-
- Careful review of the business’ books
- Evaluating the business formation documents to ensure a smooth ownership transition
- Applying a thorough knowledge of various business evaluation methods (asset-, income-, or market-based) to determine the fairest valuation
- Considering retaining a forensic accountant to evaluate potential wrongdoing or mistakes
- Negotiating a fair value of the marital estate’s interest in the business
Achieving a fair result through this process is tough, but by hiring a professional with the right expertise, you will give yourself your best chance. The truth is that you can’t afford to let this one go.