If you or your spouse is self-employed and owns a business, valuing the business will likely affect both your asset division and your final support order. Valuing a business is a detailed-oriented process that can become overwhelming if you do not have the right team in place. However, if your team is gathering, organizing, and analyzing documents in an efficient and thoughtful manner, the business valuation process, while cumbersome, is relatively straight-forward.
While every business is different, the general concept behind business valuation is that a business is worth what it can earn, multiplied by a risk factor, plus any assets the business may own. For courts to consider a business valuation, you must hire a forensic accountant qualified in business valuation to draft a report.
Your Divorce Attorney will guide the forensic accountant by presenting the applicable law and gathering evidence. That evidence could be in the form of documents (ie. financial statements and tax returns) or in the form of testimony during depositions. The accounting is certainly an important and necessary step to business valuation, but knowing how the business ticks is equally valuable. Our WSM Divorce Attorneys will use the discovery process to determine how your business is run from the marketing, to how clients come in, the what services or good are provided, how the money is tracked, who is responsible for tracking the money internally, and how do they report that process to outside world (ie. their accountants, vendors, and the IRS).
If your business is your marriage’s primary source of income, it is likely also the marriage’s largest asset. If you plan on getting divorced, you will need the assistance of an experienced Divorce Attorney with connections to equally experienced forensic accountants. At WSM we pride ourselves on the quality of the network that we have built to support our clients, so contact your local office today to learn how we can help you.