Best Practices for Negotiating Business Ownership During a Divorce

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If you’re a business owner who is going through a divorce, the
first step of the process is to determine the value of your
business. There are three different approaches utilized in the
valuation of a business by professional valuation analysts: the
asset approach, the market approach, or the income approach.


There are two different types of engagements that a valuation
analyst will employ. There's what's called a valuation
engagement, and there's what's called a calculation engagement.
These approaches, and the scenarios that rationalize their use,
are very different.


In any divorce, you’re looking at all the assets that exist so
that they can be distributed fairly, generally 50/50. When
deciding how to negotiate business interests, you’ll consider the
worth of all combined assets, the role that each spouse plays in
the business and wants to continue to play in the business, and
begin negotiations from there to ensure a fair division. This
process can vary greatly from couple to couple. Couples will want
to consider the basis, and thus taxability, of all assets before
making agreements.


When navigating a divorce with a business, it’s important to
speak with a professional about how you can utilize certain tax
laws to your benefit. A CPA will be able to advice you on how to
do this.


 If you would like to speak with one of our family law
attorneys regarding your unique family law matter, please call
our office at (503) 227-0200 or visit our website at
https://www.landerholmlaw.com/ to schedule a free consultation.


If you have questions for Darren Hall, CPA, regarding this topic,
you can email him at hall@bgocpas.com, or you can call him at
(503) 233-1133, and he’ll be happy to assist you.