BUSINESS VALUATION AND DIVISION OF BUSINESS INTERESTS

Guidance from Experienced San Diego Divorce Attorneys

As part of the domestic process, California courts have jurisdiction to determine the community property interest, if any, in a business owned by one or both parties. To divide or award the community interest in a business, the value of the business must be ascertained.

Even when a business existed prior to marriage, California case law provides the community may have a proportionate interest in this premarital business. When the issue of community versus separate character of a business arises during a divorce process, expert witnesses are generally required to provide appraisals at various dates.

In addition, a detailed analysis may be required, including the amount of community effort devoted by either party to the operation of business, the reasonable compensation for any services rendered, and a return on the separate property investment that existed on the date of marriage.

Issues That Must Be Addressed During San Diego Divorces

A related issue is a determination of income available to the operating spouse with which to pay support. A forensic expert may review the business records to determine the correct income. In a complex case, it may be necessary to examine source documents, tax returns and profit and loss statements.

A further complication is that the Family Court does not always value a business at “fair market value”, i.e., what a third party buyer would offer to purchase the asset. The Family Court has the authority to place a dollar value on a business, even if it is not saleable on the open market. The Family Court has the jurisdiction to award a business to a spouse, even if that spouse does not wish to receive the asset.

Speak with the Law Offices of Beatrice L. Snider, APC

The San Diego County family law attorneys at the Law Offices of Beatrice L. Snider, APC can assist the client in either assembling the required documentation or requesting this documentation from the operating spouse, to complete the necessary valuation of a business. Contact our San Diego family lawyers to discuss your case.