Protecting Your Interests When Dividing Businesses And Other Complex Property

Property division, determining a just and equitable distribution of marital assets and liabilities, is often one of the most contested areas of divorce. Questions of fairness and equity are often colored by the emotion of divorce.

An already complicated process, property division becomes more so when high-value, complex assets are involved. One of the most complex assets a couple may possess is a closely held or family-owned business. Meinerts Law Office, P.A., is well-versed in handling cases with complex assets, including businesses. Attorney Merlyn Meinerts can help you negotiate a fair outcome, and our trial-ready attorney can ensure that your claim to the marital estate is compellingly put forth before the law in court if necessary.

The Vital Importance Of Business Assets Appraisal

When couples must work through the division of substantial income and assets as part of a divorce, it is necessary to have legal counsel that possesses financial understanding and sophisticated negotiation skills. With business interests, a couple must choose divorce attorneys who have a full understanding of business and a network of professionals, including certified appraisers, accountants and neutral evaluators.

Having handled numerous high net worth divorces requiring business valuation and division, our team has the experience and skill required to assist clients in obtaining their fair share of assets, including pensions and retirement accounts, real estate, business interests and investment property. Working with a team of professionals, he can accurately determine income for alimony and child support purposes and determine the business value for property division by analyzing:

• Cash flow
• In-kind benefits
• Marketability of a small business interest
• Minority interest discounts to value

For divorcing couples with significant assets, including a small business, Meinerts Law Office, P.A., has the experience, skill, and resources to fully value marital property and negotiate property division.

How A Business Valuation Works During A Divorce Case

A business valuation or appraisal is necessary when a couple shares a business or their business’s value rises during the marriage, making at least a portion of its value subject to property division. If the business counts as a marital asset, both spouses may have a claim to a percentage of that value, so the first step is to figure out what the business is actually worth.

There are a variety of different tactics that can be used to do this, including the following:

• Capitalize earnings: One strategy is to look at earnings and income. By looking at the business’s past performance and growth, owners can estimate the value of the company based on the potential for future earnings.
• The market: Another option is to study the market for similar businesses. If another company in the same area has recently been sold, that can be an indicator of what the business is worth on the open market.
• Examine the stock price: For businesses that are publicly traded, the tactic is often to look at the stock price. By multiplying the price of one share by the total number of shares, the business’s overall value can be determined.
• Consider liabilities and assets: The net asset approach considers all of the assets that the company owns, such as liquid cash, inventory and real estate, and then subtracts the business’s liabilities, such as outstanding debts and lines of credit.

Exactly what tactic you decide to use will depend on the specifics of your case. In some situations, multiple tactics are used at the same time.

Common Challenges When Splitting Up Family-Owned Businesses

While determining the value of the company is a significant challenge, there can be others that arise. For instance, one person may want to buy out their spouse’s ownership share in the business, but this can be an expensive option that may require them to take out business loans, bring on investors or give up other assets.

Another potential challenge with a family-owned business is that children may expect to take the business over in the next generation. How might the divorce impact their ability to stay involved with the company? How will ownership be passed down now that ownership rights are changing? The right lawyer can help you consider these and other challenges.

Learn More About How To Protect Your Valuable Possessions

When you face complex issues during property division, you deserve to have an experienced attorney by your side. Call 952-208-8500 or reach out to the firm online to speak with a skilled legal advocate today.