As many New Yorkers know from personal experience, a divorce can be very expensive. Couples with large marital estates may require accountants, financial planners and other specialists to value assets and to respond to valuations put forth by the other spouse and his or her lawyers. Many people wonder if - or perhaps "why" - they should be required to add the cost of an independent valuation of their business to their other divorce expenses.
Determining property values can be one of the most difficult issues in a high-asset divorce. The value of a business that was established during the marriage or a business that pre-dated the marriage but that gained value during the marriage must be valued before the divorce proceeding can be concluded. An independent evaluation of the couple's assets can provide an object measure of the assets' value. Business evaluators are trained to identify and determine a value for all business assets. This valuation includes fixed assets, the value of anticipated income, the effect of depreciation and the worth of intangible assets such as good will and intellectual property.
An independent asset valuation can provide several advantages. The valuation can resolve questions about future income of the enterprise, the value of tangible assets after allowing for depreciation and liquidation value. Once the evaluation is complete, the parties can then examine their options about fairly dividing the asset - or devising compensation if the business cannot be easily split between them. Perhaps the most important calculation that a business evaluator can make is the value of the business as of the valuation date established by the court or agreed to by the couple.
Any business owner who is facing the prospect of a divorce may wish to consult an experienced family lawyer for an explanation of valuation methods and the wisdom of retaining a business valuation specialist or appraiser.