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Evaluating a business during divorce

On Behalf of | Mar 11, 2022 | High Asset Divorce

It can be especially rewarding to build a business from the ground up. After working for perhaps several years to see a profit, the last thing a Texas business owner wants is to lose it during the proceeds in a high asset divorce case. Every state has its own unique complexities when it comes to property division guidelines, so it may be helpful to research the laws in Texas before heading to court. One important thing to note is that Texas is a community property state, meaning family court judges will typically split marital assets 50/50 between spouses in a divorce. 

Valuating the business 

To determine what the business is worth, a formal business valuation must take place. In Texas, a licensed business appraiser must be called in to determine the current fair market value of the business. Each spouse should understand the meaning of fair market value, which, in essence, is the price a buyer might be willing to pay if he or she were to purchase the business at the time of the valuation. In other words, if prospective buyers were fully aware of all pertinent information, such as a business’ assets, inventory, liabilities and such, how much would they be willing to spend to purchase the business?   

Hiding assets 

Some spouses who own businesses have been known to try to hide assets to try to prevent the true valuation of a business from being discovered. This is incredibly ill-advised, as doing this is actually a form of perjury in divorce. 

A Texas business owner preparing for a high asset divorce can increase the odds of achieving the best possible outcome by enlisting support from various networks. From financial advisors to an experienced legal team, such support can help alleviate stress during all aspects of the divorce process and can ensure that all marital assets are accounted for during property division.