Valuing Your Business During Divorce Proceedings

 Posted on February 08, 2014 in Divorce

Divorce is never a pleasant endeavor. The issue of who gets what is ever present during any and all negotiations, and included with that difficulty is the very real possibility that the parties to the divorce are less than cooperative with each other, as they often harbor significant animosity. Add to all that the difficulties in dividing property, especially if that property is a business operated by the couple or one of the spouses to the marriage, and the task of divorce becomes even more complicated. Determining whether that business is marital property and its value are a paramount concern.

Valuation of Your Business

The first concern in valuing a business that is potentially subject to property division laws is to determine whether the business is marital or nonmarital property. If the business is determined to be nonmarital property, then it remains the possession of the spouse who owns it. Of course, there is the possibility that the business was started prior to the marriage but there has been an increase in value which may be considered marital property. In Illinois, 750 ILCS 5/503 deals with disposition of property, and can assist you in determining what may and may not be considered marital or nonmarital property

If the business is determined to be marital property, then there are several matters that must be addressed. The assets and debts of the business need to be valued, including inventory and office furniture. Any building and land used for the continuing operations of the business must be valued, as well. There must be a determination as to whether the business will continue as a going concern, or, if possible, whether there are options for one spouse to buy out the other. Perhaps the spouses can agree to a continued co-ownership of the business, or perhaps the most difficult to value is what the enterprise goodwill is worth. Enterprise goodwill is recognized in Illinois, and the factors that are considered include those intangible assets such as the name, reputation, customer loyalty, location, and other intangible factors. Additionally, there are always tax considerations to address.

Legal Help

If you or someone you know is contemplating a divorce and you are concerned about the accurate your business valuation, contact an experienced Illinois divorce attorney for help. The Professionals at Goostree Law Group, can provide the assistance you need. They are experienced in all aspects of divorce and they can assist in ensuring your business is valued properly. Call today 630-584-4800 for a free and confidential conversation with an attorney.