Read the transcript of this video below.
Divorces that involve businesses can be very complicated and challenging. In New Mexico, the case law says that the value of all property in a divorce case is market value. There are different ideas and different interpretations as to what that means. And there are different experts that talk about different types of valuations.
Market value is a willing buyer and a willing seller. If there is a business involved and it is going to be sold in a divorce context, then the market will determine what the value is, and the extent to which the business is formed during the marriage will be divided equally. In most cases, neither one of them want the business sold because maybe the business is the one that generates the income that maybe needed to be divided after the divorce as well.
In those cases, there needs to be a valuation of the business as a going concern. The complicated issues arise whether that business is controlled by one spouse or the other. You have a majority control of the shares and can determine the direction of the business, can determine the board of directors, and are essentially in control. That is one aspect that affects a valuation for divorce purposes if it’s not going to be sold. At Atkinson & Kelsey, we work with top financial professionals when a case involves businesses to get their expert opinion, and then work with our clients to determine the best strategy to help them achieve their goals – whether that is keep the business, which could possibly mean buying out their spouse, or selling the business.
Tom Montoya is a shareholder with Atkinson & Kelsey and he has practiced family law for over 30 years. He is a frequent lecturer, author and educator. He has taught more than 45 continuing education programs on family law for other lawyers. He has lobbied for more than 30 legislative enactments in family law and testified before the New Mexico state legislature over 60 times. Mr Montoya’s also the Chair of the State Child Support Guidelines Committee and Past Chair of the Supreme Court Civil Procedure Domestic Relations Rules Sub-Committee, which created statewide rules of procedure for domestic relations and domestic violence cases. For more information about Thomas C. Montoya and his firm, please visit www.atkinsonkelsey.com.