Q: I am a business owner. I am now getting a divorce. Is my business an asset that has to be valued for the divorce? How is a business valued for purposes of a divorce?
A: Generally yes, a business is an asset that must be valued during the divorce process. The process of valuing a business can be intricate and may involve hiring experts to conduct the business appraisal. The value of the business includes the tangible assets of the business, like the equipment, real estate, financial accounts, and so on. Also included is “goodwill.” Goodwill is an intangible asset that represents that part of the business that results in customers returning for services, and can often be connected to a specific person in the business. Valuing a business is not a concrete science, and the process is one which can be influenced by a variety of factors, including the type of business, earning capacity, the economy of the industry, ability to pay dividends, goodwill, other intangible assets, and so on.
Letty M-S Van Ert is an associate attorney at Tuft, Lach & Jerabek, PLLC located in Maplewood, MN. In addition to representing clients in the areas of estate planning, probate, divorce, child custody, child support, and other family law matters, she is also a Rule 114 Qualified Neutral (mediator) serving clients in White Bear Lake, Dellwood, Mahtomedi, Stillwater, Oakdale, Woodbury, North St Paul, Maplewood, St. Paul, Minneapolis, and the entire Twin Cities area.