A business is an asset that has to be divided in the divorce. It has a value, just like a house, car, bank account, or retirement plan. That value has to be measured so it can be divided.
The business does not have to be sold. Typically the spouse that operates the business will want to keep it. To do so, that spouse must buy out the other spouse’s interest.
Some examples of businesses that we have divided in a divorce are professional practices, including:
- Law firms
- Medical practices
- Accounting firms
- Dental practices
- Engineering companies
Some others that are more unique:
- Hair salon
- Tile installation company
- Grocery store
- Software development company
- Medical appliance manufacturer
- Private school
- Nursing home
- Insurance company
- Gift shop
To determine the value of a business we must use an acceptable measurement formula. Different types of businesses require different approaches.
Often we work with a forensic accountant to determine the community property value. In some instances, each spouse will retain their own expert for this purpose.
It is our experience that once the community’s interest in the business is quantified it becomes apparent how all the other assets and debts in the case should be assigned. It can be the key to settlement.