How to Evaluate Your Husband’s Business During a Divorce

If your husband owns a business, you may have a right to a portion of that business’s value if you get divorced. The key question then becomes, how much is the business worth? This can be a very difficult question to answer. A business is more than just the value of its equipment and furniture. Its name, vendor lists, proprietary sales methods, and accounts payable all possess value that you are entitled to. That’s why it can really pay to do your homework and make sure you get an honest and accurate valuation for your husband’s company.

Are You Entitled to a Piece of Your Husband’s Company?

Whether you are entitled to a piece of your husband’s company, and how big that piece should be is often a complicated issue. If your husband used shared, marital money to invest in his business after you were married, then you have an excellent claim against the business. Likewise, if you assisted with the business, such as performing the bookkeeping, answering the phones, or even picking out the office furniture, you may be able to make a claim.

If your husband started the business before you were married and used separate funds to finance it, your claim may be shakier.

There are a lot of other factors to take into consideration, so it is best to work a divorce attorney to determine what you might be entitled to.

How to Evaluate Your Husband’s Company

If you believe you are entitled to a portion of the value of your husband’s company, then it is in your best interest to get an accurate valuation so that you can receive your fair share. Of course, it’s worth noting that your husband may want to claim as low a valuation as possible, so he has to give you the least amount of money.

Don’t let your husband claim that his business isn’t worth anything. Even if he’s a consultant, a contracted salesperson, or a freelancer, his business may still have some value.

In order to determine the worth of your husband’s business, you’ll need to factor in things like the company’s:

  • Finances
  • Brand recognition and value
  • Assets and liabilities
  • Current contracts
  • Patents, copyrights, and other proprietary information
  • Real estate and building
  • Equipment

Smaller businesses are often easier to value. In some cases, especially if you and your husband are able to maintain a cordial relationship, it might be in your best interest to work together to establish the value of the business and determine the split yourselves. When the value of the business is modest, hiring an expert to value the business or trying to take your husband to court could wipe out any financial gains you hope to make.

Should You Hire an Expert?

Looking in from the outside, it can be impossible for you to accurately evaluate the true worth of your husband’s company, especially if he owns a medium or large business. In this case, you should definitely consider hiring an expert, such as a:

  • Forensic Accountant
  • Certified Business Appraiser (CBA)
  • Accredited Senior Appraiser (ASA)

Be aware that these experts aren’t cheap, but they could well be worth their cost, especially when dealing with a complex business.

Disagreement of the Experts

Don’t be surprised if your husband hires his own experts who determine that his business is worth far less than what your experts claim. In a worst case scenario, you may have to go to court where your experts and your husband’s experts will testify against each other.

Again, be mindful of how much money is on the line. Going to court is extremely expensive. Besides hiring the experts and paying them for their time in court, you’ll also have to pay your divorce attorney. After the judge has ruled, you may discover that all the money you just won will go straight to your lawyer and legal experts!

We recommend that you consult your attorney to determine if hiring an expert is the right thing to do. Be careful about taking your husband’s word for what his company is worth. Even if he has good intentions, he might not know how to properly value a company.

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