Business Assets, Division of PropertyNovember 3, 20200 comments

Divorce Settlement & Business Assets Northern Virginia

Dividing property is one of the trickier aspects of divorce and adding a business into the mix only further complicates things. Divorcing entrepreneurs often want to know how their divorce settlement with business assets works in Northern Virginia.

Because marital property is generally divided equally, business owners may wonder if this holds true for them. Keep reading to learn how business assets are commonly valued and distributed during divorce.

Methods to Determine a Business’s Value

Because businesses cannot be valued in the same way that other investments and property are, there are a number of ways of ascertaining its worth. Your attorney may discuss retaining an expert to determine a business’s value, both for purposes of reaching a negotiated settlement, or if necessary, to testify as an expert during litigation.

Income-Excess Earning

This method of valuation looks at the income the spouse earns from his or her business and compares that to an average salary of a comparable peer. If the spouse earns more than his or her peers, that excess becomes part of the business’s value.

Asset Valuation

Each of the businesses assets is valued, and this creates a picture of the business’s worth. Assets can include physical goods, such as product inventory and real estate, for example. Intellectual property may also be considered an asset.

Market Valuation

Yet another method of determining value for the sake of a divorce settlement of business assets in Northern Virginia is market valuation. This method uses the selling price of similar property to approximate the business’s value.

Will I Lose My Business?

Typically, the business-owning spouse is not forced to sell their business or share it with their spouse. However, an equitable portion of the business’s value may be owed to the non-owning spouse in the settlement.