I own a small business, and I think my wife is planning on leaving me. All the signs are there. She stays out late, bought a new wardrobe and goes to the gym. So she leaves. How will my business be divided? I started the company during my marriage. I am worried I will owe her too much money.
You are correct that small businesses acquired during the marriage are marital property. As such, the business is subject to valuation and distribution in the equitable distribution. Businesses are initially valued at the date of separation. The business valuation needs to be performed by a competent, credentialed business appraiser. Two of the certifying bodies are the National Association of Certified Valuators and Analysts (NACVA) and the Association of International Certified Professional Accountants (AICPA). Both organizations have testing processes for designations, which for NACVA is the CVA and for the AICPA is ABV. Both organizations have high ethical standards.
The three approaches used by business valuator are the asset, income, and market approaches. The result may be a calculation of value or an opinion of value. One needs an opinion of value for trial, but a calculation may be helpful in a mediation and is less expensive.
For your consideration, you might find a business appraiser and find out what your business is worth for purposes of equitable distribution. You will then be prepared and less worried. Write me again if you need a referral to a competent business valuation professional.
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