Determining the need for calculation or valuation in a divorce

In California, a business owner who gets a divorce may have to split some of the assets of their enterprise with their ex. In such situations, it’s important to establish an accurate value for the business before negotiating the divorce.

Choosing a valuation analyst is the first thing divorcing spouses with businesses should do during the procedure of equitable distribution. The next step is determining whether they need the analyst to provide a calculation of value or conduct a full valuation of the assets. A calculation is generally cheaper and takes less time to complete than a full valuation. However, a full valuation provides a higher level of reliability and certainty.

Deciding how to proceed depends on a variety of factors, so the best course of action for one divorcing couple may not be the same for another. A good rule of thumb is that a calculation is often enough for divorcing spouses who are participating in mediation or similar negotiations. They are more likely to need a full valuation if an arbitrator or judge is deciding how their assets will be divided upon divorce.

Divorcing spouses don’t always need a full valuation under these circumstances, especially if they are willing to come to an agreement through compromise. On the other hand, some companies are more complex and require full valuations to determine their true worth.

The division of property may be a very emotional and distressing part of the divorce process, particularly when the spouses own one or more businesses together. Along with choosing a valuation analyst, they might each seek the services of family law attorneys.