Fort Lauderdale Business Valuation Attorneys
Let Us Guide You Through Your Unique Challenges
The attorneys at Stok Kon + Braverman thoroughly understand the nuanced issues surrounding business valuation in the context of a divorce. If you need advice about how to assess the true value of an enterprise, then you should consider contacting one of our experienced divorce lawyers. Our dedicated business valuation lawyers take pride in mastering the details of this area, and we have a forward-thinking approach when it comes to analyzing financial information. Our knowledge can give you a significant edge when it comes to protecting your interests during the division of marital assets.
Common Business Valuation Techniques
A business can be assessed according to either its ongoing value or its liquidated value, but it is more common to use the ongoing value if it is expected to survive past the divorce. Valuation experts like CPAs typically become involved, since this process can be highly technical.
Three main standards can be used in assessing the worth of a business upon divorce:
- Market-Based Approach: This system of valuation is often considered the most accurate and relies on comparisons to similar businesses that have recently been sold or are about to be sold. However, problems can arise when a business is very distinctive or has accumulated substantial goodwill, which can be hard to quantify.
- Asset-Based Approach: The expert decides how much money the assets of the enterprise would be worth if the business was liquidated in a sale. If the marital business is being liquidated, this might be the most effective method to use.
- Income-Based Approach: This method is more dependent on conjecture than the others because it attempts to compare the current net value of the business against its projected net value in five years. This becomes very complicated and potentially inaccurate if one of the spouses not only owns but also runs the enterprise. Valuation experts usually adjust for risk and market conditions when using this method.
It is important to note that there is one significant part of a business that is not considered a marital asset and will not be divided in the divorce. This is goodwill, which is the part of the enterprise’s value that arises directly from the owner. It would not be appropriate to divide this value between divorcing spouses because only one of them was responsible for creating and maintaining it. Goodwill can be difficult to estimate, but whatever value is attributed to it will remain a separate asset of the individual who established it.
Our seasoned family law attorneys at Stok Kon + Braverman are familiar with the complexities of balancing the well-being of an enterprise with the rights of each spouse who has an interest in it. We will help you decide what strategies make the most financial sense for your long-term needs. Our lawyers will work closely with accountants and financial experts to develop a solid understanding of the interest of each spouse in the property.