Business Ownership after Divorce

Hiring a valuation expert can help you to gauge the value of your business and what part of it as a marital asset will be divided and given to your spouse.

By Brandi Ruffalo
January 22, 2011
IL FAQ/Asset and Property Issues

“I have a business that I have built up with my business partner while my spouse worked full time for a company. What should I do to keep the business?”

A business developed during the course of a marriage is considered a marital asset. Therefore, both spouses are entitled to an interest even if only one spouse is involved in the business. Depending on state law, the way the business is divided varies; but regardless, the value of the business will be added to the total marital assets and liabilities to be divided up.

Establishing the value of a business is a complex procedure that is best left to a valuation expert. Usually fair market value or fair value is the standard used in divorce cases. There are many variables that increase the complexity of private business value in a divorce. Some of these include:

  • The separation of business value from reasonable salary;
  • The investment of marital assets into the business;
  • The existence of a buy-sell agreement with a defined purchase value;
  • The impact of less than a 100% ownership in the business;
  • Recent changes in income and expense levels in the business;
  • The need to incorporate cost required to drive future growth and/or maintain the current returns from the business; and
  • The classification of risk and the resulting “reasonable return”.

Additionally, the knowledge gap between the involved and the uninvolved spouse can create tremendous anxiety regarding the true value of the business. The best approach is to hire a valuation expert who can help to establish a reasonable and fair value and assist you in your decision process regarding future ownership of business interests.

Brandi Ruffalo is a financial divorce advisor with Valuation & Forensic Partners, LLC in Chicago and Schaumburg in Illinois. She specializes in basic lifestyle and financial analyses to the valuation of private businesses or stock option.

Back To Top

By Brandi Ruffalo| January 22, 2011
Categories:  FAQs

Add A Comment


Allowed HTML: <b>, <i>, <u>, <a>



Divorce Lawyers

Certified Divorce Financial Analyst

Find all CDFAs

Divorce Mediators

Find Divorce Mediators

Business Valuators / CPAs

Find Business Valuators / CPAs

Collaborative Practice

Find Collaborative Practitioners

Reason for your Divorce

Why did your relationship end? If there's more than one reason, choose the strongest factor.

Money Problems/Arguments
Physical/Emotional Infidelity
Physical/Mental Illness
Physical/Emotional Abuse
Alcoholism/Addiction Issues
Basic Incompatibility

Copyright © 2017 Divorce Magazine, Divorce Marketing Group & Segue Esprit Inc. All rights reserved. Reproduction in whole or in part without prior written permission is prohibited.