Family Law Prof Blog

Editor: Margaret Ryznar
Indiana University
Robert H. McKinney School of Law

Tuesday, June 19, 2018

Valuing a Closely Held Business in Divorce

From McNees Law:

Valuing a closely held business can be a complex endeavor, requiring a through analysis of assets, financial statements, financial claims, earning potential and inherent risks. A host of other factors can also influence the determination. Valuations are especially tricky in the context of contentious divorces involving businesses. In such cases, each spouse should not only have his or her own lawyer, but also a forensic business evaluator to ensure the thoroughness and accuracy required to make an informed decision regarding equitable distribution and to secure the best result.

This article discusses the valuation process and methods used, notes common pitfalls, and offers practical pointers on what to do when divorce is or may be on the horizon.

Whether considering a divorce or facing one where either or both spouses have a closely held business, each spouse should consult a lawyer with extensive experience in handling divorces involving business valuations and in working with forensic business evaluators. That experience is key when determining whether the business has value or is simply providing a job to the owner, when selecting forensic evaluators, reviewing documentation, or challenging the opposing experts’ valuation and in ensuring the best possible outcome for the client. An experienced attorney can streamline the process and avoid the unnecessary expenditure of funds.

Read more here.

https://lawprofessors.typepad.com/family_law/2018/06/valuing-a-closely-held-business-in-divorce.html

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