The divorce lawyers of Figeroux & Associates work with people whose property division problems will involve the characterization, valuation and distribution of business assets. Our clients include both the spouses who are actively engaged in a professional practice or a closely held corporation, and the spouses whose interest is mostly or entirely passive. Contact our office in New York to learn more about business asset valuation in New York divorce and the best ways to resolve the issues that are likely to develop in your case.
Understanding the Division of Business Assets in New York Divorce
An extremely unlikely outcome in the division of business assets as marital property is the transfer of a controlling interest from one spouse to another or the introduction of the passive spouse into the active management or operation of the business. What is more likely is that the active spouse will need to buy out the other spouse’s marital interest as part of a comprehensive property settlement agreement or court-ordered distribution. The key question in this process comes down to this: How much is the business worth? Even before getting down to questions of valuation, it is first necessary to develop an accurate characterization of business assets as marital or separate property. If the business interest was acquired before the marriage, what will be subject to division is not the business itself, but its appreciation in value over the length of the marriage.
If the business was started during the marriage with the separate property — including a premarital degree or professional license – of either spouse, it might be possible to treat that spouse’s contribution as separate property, while regarding the appreciated value of the business net of that amount as a marital asset subject to division. Once the characterization problems are resolved or at least defined, valuation of the business assets can begin. Business asset valuation in New York divorce is an inexact science at best, and it is often necessary to educate the other spouse and the court as to the concepts and techniques applied in the exercise. Keep in mind that what is at issue is the net value of the assets, not the market value. If security interests or mortgages can be enforced against the assets, only the value of the party’s equity should be considered as part of the marital estate. When the business property exists in the form of inventory, equipment, accounts receivable, vehicles, real property or other hard assets, the valuation problems are relatively simple, and a net value can usually be determined through expert testimony and negotiation. Harder to quantify are such assets as intellectual property rights, the earning power of a professional license, or the goodwill of an established business.
At Figeroux & Associates, our experience with the resolution of difficult business valuation problems in New York divorce can help you understand the scope of what’s at stake in your case. Our matrimonial law attorneys can find practical ways to protect your interest in a fair property settlement. Although the valuation of business interests can complicate the property division issues, we know how to match valuation techniques to particular businesses, and protect our client from an opponent’s overstated or understated valuation. Contact us in New York for the advice of experienced New York business asset valuation lawyers.