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Divorce involving family business can be complicated

| Jan 4, 2018 | Divorce

Around 2 percent of marital unions end each year. When marital assets in New Jersey include family businesses, divorce proceedings can become especially complicated. How much a value is worth and how much cash flow the business is generating are a couple of matters that are heavily contested in many of these types of divorces.

In many divorce situations, one party wants a value that is low for the family business, whereas the other party is looking for a high one. The problem is that the spouse who does not run the business usually has little knowledge about its finances. However, he or she may automatically assume that it is extremely profitable.

Because two future exes may not be able to see eye to eye on a business’ valuation, having a Certified Public Accountant value the business may be a good idea. The ideal accountant is one with a certification in business valuation — a designation that most accountants do not carry. With this designation, the accountant can provide a business value and explain why this value is sensible.

Because a business in New Jersey is oftentimes a high-value asset during divorce, ensuring that it is valued correctly during a divorce proceeding is paramount. An attorney can work with a valuation analyst to help a business owner to protect this important asset that he or she has worked hard to build over the years. At the same time, an attorney can help the non-operating party to get a fair share of these assets.

Source: sbnonline.com, “Accountants can help family business owners protect assets after a divorce“, Jan. 2, 2018