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When a divorcing couple shares a business, the separation can take on a whole new dimension. To each spouse, the business represents their personal investment of time, money, and labor. The emotional attachment and personal identification with the business can make valuation disputes some of the most stressful areas of disagreement in divorce cases.
If you are struggling with business valuations following an Austin divorce, you need advice from a property division attorney who has experience in handling corporate issues. At Kimbrough Family Law, our team could help you come up with a strategy for completing a business valuation that furthers your personal and financial goals during a stressful time.
When business owners divorce, both partners often agree that the company is marital property. What happens instead is that they disagree about how the company should be valued. Business valuation can be complex since it depends heavily on when it occurs, what assumptions are made, what forecasts are relied upon, and what adjustments are taken into account.
In Austin divorces, business valuation conflicts are especially acute when one party has an incentive to come up with a higher valuation, and the other party has an incentive to come up with a lower one. Even small disagreements about percentage points can shift ultimate payment obligations by considerable amounts and affect how your divorce proceeds.
When the valuation is determined is a frequent point of contention. The valuation can be determined based on the date of separation, the date of the divorce trial, or any other point that the couple agrees upon. Because many factors can affect how much a business is worth on any given date, the choice of timing is one of the most important factors in the ultimate outcome of how the property will be divided.
In addition to the timing of the valuation, separating couples may also disagree about projections concerning things like growth, margins, or profitability. Each party has an incentive to rely on different markers of economic success or growth or different reports of industry trends. Our attorneys could help you fight for a just and fair valuation and division of your business and associated assets in Austin, prioritizing the minimization of conflict to keep the process moving smoothly.
While it may not be possible to eliminate all areas of disagreement regarding business valuations during a divorce, the right strategy helps the process go more smoothly. First, check to see if corporate documents or your prenuptial agreement have already defined valuation methods. If there is a legal document already in place that addresses these issues, that is one less issue to argue about.
Next, contact a dedicated divorce attorney who can help you find independent experts in Austin for the business appraisal, either by choosing one neutral appraiser or allowing each party to pick their own appraiser and adding a third neutral appraiser to break any ties. Sometimes valuation disputes can be arbitrated separately, which can be attractive to business-savvy spouses who prefer business decisions to be made by a corporate arbitrator rather than in a court of law.
Finally, make sure your ex-spouse provides full disclosure of all relevant information and any supporting data. Clean, up-to-date financial documents and helpful supporting documents are necessary for a fair determination.
When divorcing spouses are also trying to divide up a shared business, it can make the process even harder. Facing these issues in both your personal and professional life at the same time can feel overwhelming. Having a trusted legal team on your side can make a big difference in how the process feels. At Kimbrough Family Law, our lawyers have the experience to understand the impact of business valuations following an Austin divorce. Reach out to us today with your questions and to schedule a consultation.
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