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How can you determine your family business’s value in divorce?

On Behalf of | Sep 13, 2021 | Family Law

Property division disputes are one of the many matters that can hold up a divorce, making it hard to amicably settle issues between you and your spouse. This can send you into a courtroom for a judge to make such decisions for you.

Determining value of the family business is something spouses often struggle with. However, it doesn’t have to be challenging.

What factors are considered?

Various details go into coming up with a business valuation, including:

  • Brand reputation and recognition
  • Established partnerships
  • Tangible assets, such as technology, furniture or an office building
  • Intellectual property rights

An industry or company’s forecasted growth may also impact its value.

Most divorcing spouses can approximate the value of different assets they own by searching for comparable tangible items or property value assessments online. However, it’s wise to have an experienced business appraiser assess of your company’s value.

Your appraiser will likely ask you why you’re having the appraisal performed. The assessed value they may assign your business will likely vary depending on whether you’re:

How the appraisal impacts property division discussions

Spouses often take the appraiser’s valuation and negotiate one of the three following settlements to move property division discussions along:

  • They decide to maintain the status quo and continue working as business partners.
  • They agree to divest themselves of their business, often selling it off to an investor and splitting the proceeds of the sale.
  • One spouse buys out the other spouse’s stake in the company (and turns over a larger share of other property to facilitate the “sale”).

Determining when negotiations have reached a standstill and it’s time to bring in an appraiser isn’t challenging. Deciding what to do after you learn its value can be hard. You’ll want to spend more time learning about Tennessee property division laws before finalizing any negotiations in your case.