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What Is a Divorce Business Valuation Expert?

What Is a Divorce Business Valuation Expert?

A divorce business valuation expert is a professional used in divorce proceedings to help establish values for a business owned by the divorcing couple, as well as other marital property. Marital property can be considered any type of personal property, investments, businesses, real estate, retirement accounts, and other such items obtained during the course of the marriage.

The valuation expert will use one of three different methods to value commercial/investment properties.

  • Income Approach - When this method is used, the value expert will look at the potential future earnings of a business, along with the appraised value of the building to arrive at a current value.
  • Market Value - The market value is establishing a value for the property based on current values in the market. This method is commonly used to value the marital home. With businesses, it can be used to establish the value of the building and be combined with the income approach to reach the final value.
  • Cost Approach - The cost approach is mainly used for new construction situations. This method is where the value expert will determine the costs to build an identical business, along with any needed improvements. They then deduct deprivation from the value to determine the current value of the property.

Once all marital business property has been valued, then it gives the divorcing couple a better idea of their business assets so they can work toward an equitable division of property.

Why Are Valuation Experts Needed for a Divorce?

Most couples have no idea what could be considered a fair value for their interest in a business. There is the building, furniture, fixtures, and other such physical property to take into account. Then you also have to consider how much the business is earning and the profit it makes.

Disagreements tend to arise over business interests during a divorce. One person might say the other never played an active role in the business so they should not be entitled to any part of it. The other person, though they did not participate daily, may have provided the initial money to start the business from an inheritance they received prior to being married.

Business Valuation Expert

As you can see, with businesses and divorce, the division of assets becomes more complex. You will need a valuation expert if you and your spouse own a business. In addition, if you and your spouse cannot reach a settlement agreement on your own and have to appear in front of the judge to determine how your property is to be divided, the valuation expert can be called as a witness.

If you are in the process of filing a divorce, and you and your spouse own a business or have significant assets, it is important to not only be represented by an experienced divorce lawyer in Long Island but also to have your lawyer help you find a valuation expert to help protect your interests.

To schedule a consultation appointment, please feel free to contact The Law Office of Robert H. Montefusco P.C. at (631) 801-0007 today.

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