How to Determine Business Valuation in a Divorce

Date Posted:June 24, 2014 | Categories:Divorce and Dissolution

Determine Business Valuation in a Divorce

The appraisal of a Business or Professional Practice is a complex matter. To properly determine the overall value of the business, it is essential to gain access to all of the financial records related to the business. Access to the chief operating officer or principal of the business and often to the business’ accountant is often very important. Then selecting an appropriate business or professional practice appraiser is almost always needed.

Most competent business appraisers analyze business and professional practices using three basic approaches:

 

  • A market approach
  • An income approach
  • An asset approach

            These three approaches are complex and require considerable expertise but with the results of all three approaches available, an analysis of all three will aid greatly in determining the fair value and also be essential in supporting the appraisal result. Having an experienced attorney who will work with the accountants and the forensic appraiser is essential.

            Once a valuation is obtained, it is very important that a fair and equitable division be made. If one or both spouses are active in the business, it is essential that the success of the business is not disrupted by inappropriate changes. If only one spouse is to retain the business or professional practice, it is important to off-set the value in a division of other assets to the other spouse.

            The key is to determine the best strategy to fairly divide the business or professional practice. It is, therefore, essential that you have an attorney with extensive experience in identifying the most effective strategy for accomplishing a fair property division. An attorney with such extensive experience and good working relationships with a network of forensic accounts, analysts and business valuation experts will best perform the wide range of services needed and provide the best counsel in accomplishing a result that will work for you.

            The attorneys at Edward F. Whipps & Associates have the experience and close relationships with the needed experts as well as the knowledge of how to acquire all of the relevant information needed. They frequently identify unique strategies that are specific to the given situation. If you would like to schedule a confidential, in-depth consultation with Edward F. Whipps & Associates, you may call us at (614) 398-4182 or toll-free at (877) 367-6544.