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Valuing Businesses

In this day and age of entrepreneurs, a spouse may own or operate their own business, may be a partner in a business or professional practice, or both spouses may have started and own businesses together. Owning and operating your own business can be very rewarding and lucrative, but it also can cause significant issues in the event of a divorce. Last week we spoke about the difference between community property and sole and separate property. Businesses and business interests are another property interest that needs to be defined, valued and divided in a divorce.

Usually, it is not practical or advisable to have both spouses continue to operate a joint business after divorce nor to have a non-participating spouse suddenly thrust in the day to day operation of the other party’s ongoing business. Therefore, the business or ownership interest needs to be defined as whether it is community property or if the marital community has some sort of an equitable interest even if it is one party’s sole and separate business. This issue alone can be very complex and hotly disputed. Once that is determined, we need to calculate what the dollar value or amount is for the community interest in the business which requires and entails a complete assessment and valuation of the business as a whole. Again, not only will this likely require the time and expense of hiring an expert to value the business, but there are different methods available to value businesses and disputes can arise as to which method to use, whether the calculations done were correct, etc. All of this can be very overwhelming, complex and aggravating for even the most business-savvy, and having an attorney well-versed in navigating such business valuation issues in a divorce can be absolutely crucial to not only your piece of mind but for your financial future.

The attorneys at Owens & Perkins have years of experience in dealing with the division of businesses and business interests in a divorce. If you find yourself, a friend or a loved one are in need of assistance in a divorce involving a business, please call OWENS & PERKINS at 480.630.2464 to schedule your free 30 minute consultation.

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