How can business valuation affect property division?

| May 20, 2015 | Property Division

Property division is rarely ever the easiest step in the divorce process. This is because most Massachusetts couples don’t realize how entangled their assets — as well as their debts — have become until they are forced to separate them. As you can imagine, this can lead to disputes, especially if one spouse thinks they’re not getting a fair deal.

But property division for the average couple is relatively uncomplicated when compared to property division for business owners. That’s because people who own a business and are going through the divorce process have an added step when it comes to dividing their assets. And oftentimes, it’s this added step that can create problems of its own.

Called business valuation, this step is a complex process involving appraisers and those with considerable experience with businesses who evaluate a business in order to determine its economic value to the owner. The reason why this becomes important during property division is because a business could be considered property, which must then be divided appropriately in accordance with our state’s equitable distribution laws.

As you can imagine, assessing a business in order to determine is value is not an easy task. But what may be far more challenging is determining what part of the business each spouse should get in the divorce. For this decision, a Massachusetts judge will take a number of things into consideration including, but not limited to: length of marriage, extent of ownership in the business, when the business was acquired, and even the impact each spouse had on the business.

In order to protect your interests during property division, couples who own a business should consult with an attorney who has experience in both family law and business law. Here at Seder & Chandler, LLP we have that experience and will work with you through the business valuation step so that you can more easily move through the divorce process.