If at the time of Divorce, either party has an ownership interest in a business, whether it is a corporation, a partnership, a sole proprietorship, or even a professional practice, that ownership interest has a financial value that needs to be considered in the division of property between the parties. Rarely is a couple able to remain joint owners of a business after their divorce. One usually keeps it, and in exchange, pays the other party a sum of money or gives them sufficient other marital property, in exchange.
There is no simple method to determine how much a business is worth. Neither the face value of the stocks the parties own, nor the businesses balance sheets and raw financial data, can accurately describe the business’ financial value. If both agree to sell the business, assuming it is one that is capable of being sold, the amount of money received in exchange for its sale will determine how much it is “worth”, and the net sales proceeds can be divided as is fair.
It’s more difficult to determine a businesses’ fair market value if it is not decided in the market place. If it is logical for one party to get the business, and the other to get something of reasonable value in return, a decision has to be made as to how much the business is worth. Our firm uses respected, knowledgeable experts, who have demonstrated their expertise and creditability with the courts over the years, to determine that value. Whether or not we represent the person keeping the business, or being compensated for allowing the other party to keep it, we will acquire that information necessary to allow our experts to research the relevant facts, and determine a fair value for the business.
The same holds true for stock options. Often times it is impossible to divide them or immediately exercise and sell them, to determine their worth. We use experts that will help ensure that the appropriate value is placed on those options, and their value fairly distributed to our clients.
If you are a business owner considering a divorce, contact Detroit divorce attorney Carlo Martina today to schedule a consultation. From his Plymouth law office, he serves Southeastern Michigan, including Wayne, Washtenaw, Oakland and Livingston counties.