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Modern law treats divorce like the dissolution of a business partnership. Under Washington law, both spouses have an individual interest in property that is considered to be part of the marital community estate.
When one or both spouses were involved in the creation and development of a business operation, complex property division issues can arise if they get a divorce.
If you are a Washington business owner who is getting a divorce, you should consult an experienced Spokane business valuation attorney for legal advice.
At Twyford Law Office, we have:
Contact us at (509) 327 0777 for more information about our legal services.
Business valuation is important when it comes to property division issues. In a divorce, both spouses may try to claim a separate interest in a business they started during marriage. A spouse could also claim a community property interest in a business that would otherwise qualify as their spouse’s separate property. However, if any contribution was made by a spouse, whether labor or monetary, they may be entitled to a portion of the value. Whether an asset is considered community property or property of only one party will also depend upon the date of its purchase or acquisition.
Under Washington law, all property acquired during a marriage is community property. Property that was not obtained during the marriage is considered to be the separate property of the spouse. Additionally, property that a spouse acquires solely in their name through gift, bequest, or devise is their separate property. When spouses get a divorce, a court will divide community property between the spouses.
At Twyford Law Office, we have experience with business valuations for property division purposes in a divorce. We can take care of the following issues:
When establishing the total value of a business, both the current value and future earning potential must be determined. In general, a valuation will take place as close to the date of the divorce settlement or trial as possible. Common methods used in this process, include:
Most often, a financial expert, business valuation professionals, and real estate appraisers will need to be consulted to accurately estimate a business’s worth. It is not uncommon to see both parties hire experts in high-value asset divorces, who will assess the business and testify in court on how they came to their valuation.
In preparation, experts will examine the following financial records:
External factors will also be considered, such as the type and location of the business, current economic conditions, and future trends that may affect profitability. The business will then be assigned a fair market value and an estimated future earning potential. When there are two competing valuations due to each party hiring a different appraiser, the court may decide to either choose one value or take an average of the two.
Once a business valuation is complete, the parties can then decide how they would like to proceed. Examples of options include selling the business and dividing the profits, or continuing to jointly operate it. A spouse who does not want to keep the business, when the other does, can be bought out for the value of the interest in the business or given marital property of equal value.
Handling this type of divorce matter requires an understanding of valuation principles, relevant case law, taxation, compensation issues, accounting principles, and general foundational business knowledge. An experienced divorce lawyer will possess this knowledge along with the necessary skills to ensure a business valuation is fair and accurate. There’s also the benefit of gaining access to a wide network of experts, who can have a significant impact on the final settlement or trial result. Since property division is one of the most complicated tasks in the divorce process, hiring a business valuation attorney can protect your current and future financial wellbeing.
For many entrepreneurs, their business is like their “baby.” As a result, people can get extremely protective of their business interests. Understandably, you have dedicated your blood, sweat, and tears to creating and growing your business. At Twyford Law Office, we can appreciate the significance your business has in your life. Our business valuation lawyers can handle the legal and financial aspects of valuing your business in a divorce, guiding you through each aspect of the process, so you can reach an informed decision about your legal options – as any caring business owner would.
Call Twyford Law Office at (509) 327-0777 or contact us online today to arrange a free consultation about your case.