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Attorneys at Raleigh Divorce Law Firm

How will I value my business during my divorce?

On Behalf of | Jan 25, 2022 | Property Division |

When facing a divorce, business owners often have one common worry. What will happen to their business?

In most cases, a business is considered marital property in the event of a divorce, so spouses must divide the business assets according to North Carolina law. To do so, you must obtain the accurate value of your business first.

What approach should you take to value it?

As a business owner, you know the importance of value. It affects everything you do, and every decision you make. It also comes into play in the event of a divorce.

There are various ways to calculate the value of your business, but the three most common tactics used include:

  • Valuing by income, or determining the business’s value based on its earnings and earning capacity
  • Valuing by assets, or comparing the business’s assets versus its liabilities
  • Valuing by the market, which means comparing the business within the market and determining the value if you were to sell the business emphasizes using all three of these approaches. This could help calculate a more comprehensive value.

You may know the inner workings and financial facts about your business. After all, you are the expert. However, there is no room for risk when it comes to your business. That is why it is often critical to work with legal and financial professionals to accurately value your business and protect it during your divorce.

Why is it important to obtain an accurate value?

Valuing your business to divide that asset in your divorce can be frustrating. Dividing this asset is necessary under the law, but it is difficult when it is your business, and your dream that you worked hard to build from the ground up.

However, it is important to ensure fairness in the property division process. Providing an inaccurate value of your income and your business could lead to issues down the road. One of the main issues could involve accusations that you hid assets, which could further complicate your divorce – as well as put your business at risk.

You should approach property division with honesty as well as strategy. That way, you can maintain fairness while protecting the future of your business.