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Wheaton Business Valuation in Divorce Lawyer

Naperville Divorce Attorneys Assisting Clients With Complex Asset Valuation

Glen Ellyn Family Business Divorce Attorney

When spouses decide to end their marriage through divorce, the process of separating their lives from each other can be a lengthy, stressful undertaking. Resolving issues related to the division of marital property can require a great deal of time and effort by both parties, and this process can become even more complicated when one or both spouses are involved in family-owned businesses or other business partnerships.

As with any other marital property, business assets are subject to equitable distribution between spouses during divorce. While businesses which were founded prior to a marriage will typically be considered non-marital property, any marital funds invested in the business or increases in the business's value due to contributions by either spouse may be considered marital property.

Understanding the Value of Business Assets During Divorce

In order to get a complete picture of a business's value, spouses may require the assistance of experts such as business appraisers or accountants. With the help of these experts, the spouses and their attorneys will typically use one of three methods to determine the value of the business:

  • Income Approach - This is the most common method of valuating a business, and it consists of looking at historical sales data, current cash flow, and projected future earnings, as well as possibilities for growth and potential depreciation. By considering risks and potential rewards, this approach can provide a complete look at the business's past, present, and future to give spouses a full understanding of its current and expected value.
  • Market Approach - This method consists of comparing the business to other similar businesses, looking at aspects such as viability, future prospects, relationship with customers, and role in the local community. The sale prices of similar businesses will also be considered. This approach is best for couples who are planning to sell their business during their divorce.
  • Asset Approach - This approach consists of a straightforward calculation in which a business's liabilities are subtracted from its assets. These assets can be both tangible (inventory, infrastructure, etc.) or intangible (patents, accounts receivable, etc.).

Protecting Businesses During Divorce

Spouses who own an interest in a business often face a dilemma during divorce, since they will likely want to keep their business intact following the dissolution of their marriage. In these cases, divorcing spouses have a number of options, including having one spouse buy out the other spouse's share of a family business with cash or by offering them a greater share of other marital assets, such as the marital home. If a couple is able to maintain an amicable relationship, they may choose to continue to co-own and co-manage a family business following their divorce, with the option for one spouse buying out their partner at some point in the future.

The best way that entrepreneurs can ensure that family-owned businesses are protected is to create a prenuptial or postnuptial agreement specifying what will happen to their business interests in the case of divorce. Whether you are looking to protect your business through one of these agreements, or you are already involved in the divorce process and need to understand the impact of your business assets, the skilled divorce attorneys at Anderson and Associates, P.C. can help you understand your rights and obligations. We will work with you to ensure that all marital assets are divided in a fair and equitable manner.

Contact a Wheaton divorce lawyer at 630-653-9400 to schedule an initial consultation. We serve clients in Glen Ellyn, Warrenville, Winfield, Glendale Heights, and throughout DuPage County.

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