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Business valuations during property division

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Business valuations during property division

| Aug 29, 2016 | High Asset Divorce |

The division of property during a divorce for a Pennsylvania business owner could require a business valuation by an independent expert. This number would be used during divorce negotiations. The size and complexity of the company as well as the level of animosity between the divorcing spouses could influence the extent and cost of the analysis.

Two methods exist for determining the value of a business. The first type, a full valuation, goes into detail and produces the most reliable figure. Because of the amount of effort required to determine a full valuation, this method represents the most costly route. The second method is known as a calculation of value. To achieve the calculation, a financial analyst would create an estimate. Less time is needed, and it is therefore a more affordable option.

A complex business might warrant a full valuation whereas a calculation might suffice for a smaller business. The entities using the information to make decisions also factor into the choice of valuation method. A full valuation might be appropriate if a judge or arbitrator is ruling on the division of assets. When a mediator brokers a divorce agreement, a calculation of valuation might satisfy the parties involved.

A business valuation might be one factor among many that needs to be addressed during a high-asset divorce. Legal advice could allow a person to understand options for negotiating a divorce. A family law attorney could inform a client about rights to certain assets and attempt to negotiate a comprehensive settlement agreement that addresses other applicable issues besides property division.


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