Call Now

Call Now

Call Now

Blog

Three Problems of Valuing a Business That Is Part of The Martial Estate

Three Problems of Valuing a Business That Is Part of The Martial Estate

In many cases, a martial business ranging from a minority stock ownership in a business, such as a car dealership, to a physician practice, may be a large source of marital income. However, when a divorce is filed, there are three major problems a spouse may face with such in maintaining what he or she believes is a just and equal division and maintaining a lifestyle as if the divorce had not occurred. This blog addresses three key problems in high-asset divorces or where there are high-income earners.

First, with certain businesses, the value of the business is the goodwill of the particular husband or wife and not a name or the business itself. However, this may be subject to dispute and it is key to engage a seasoned business valuator at the outset of the divorce to determine the range, which may be $0 to millions.

Second, certain businesses have mandatory buy-sell agreements. These fix a method of valuation in the event a stockholder or owner has a divorce filing. While this may result in a payment that is a marital asset subject to division, the real value of the stock may not come to pass because of this term of being issued the stock. The purpose of these agreements in small corporations is to keep disgruntled ex-spouses from interfering with this business and may even result in a loss of employment.

Third, in a closely-held corporation, if a spouse in a divorce owns less than half of the stock, unless they bylaws specify differently, he or she may be “frozen” out with a divorce filing whereby the other stock owner refuses to provide a value for this ownership. This is a complex question that requires a close look at the state’s business laws and compliance with the bylaws.

In short, where a business is a large part of the marital estate as to value or income, it is key to get experts involved early on in the process. Failure to do so may significantly weaken one’s position and net award at a divorce trial. This blog post was written by attorneys at Ciyou & Dixon, P.C. who handle divorce cases throughout the State. This is not intended as a solicitation for legal services or legal advice. It is advertising.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest
Share on email
Email

We Listen & Care

Proven & experienced attorneys successfully advocating & resolving complex cases for over 25 years

Quick Contact

Need to talk now? Fill out the quick form below and we will contact you directly.
Blog Categories

Get In Touch

We're available to answer your questions 24/7.

Related Videos

Contact Us

Please fill out the form below and we will be in touch with you shortly.

Ciyou & Dixon, P.C., is a law firm located in Indianapolis, Indiana. We serve clients in six core practice areas: family lawappellate practicefirearms lawgeneral practicepersonal injury and criminal law.

Copyright © 2021 Ciyou & Dixon, P.C., Attorneys at Law. All rights reserved. This Site does not provide legal advice; please review the disclaimer for other limitations. Privacy Policy

Based in Indianapolis and founded in 1995, Ciyou & Dixon, P.C. is a niche law firm focused on successfully dealing with the complexities of divorce, high-conflict child custody and family law. Known for their ability to solve extremely complex situations with high quality work and responsiveness, Ciyou & Dixon will guide you every step of the way. The family law attorneys at Ciyou & Dixon, P.C. will help you precisely identify your objectives and the means to reach your desired result. In addition, this practice focus is augmented by the firm's other three core areas, namely appellate advocacy, civil practice, and firearms law. Life is uncertain. Be certain of your counselSM.

Indianapolis Divorce Attorneys, Ciyou & Dixon, P.C. of Indianapolis, Indiana, offers legal services for Indianapolis, Zionsville, Noblesville, Carmel, Avon, Anderson, Danville, Greenwood, Brownsburg, Geist, Fortville, McCordsville, Muncie, Greenfield, Westfield, Fort Wayne, Fishers, Bloomington, Lafayette, Marion County, Hamilton County, Hendricks County, Allen County, Delaware County, Morgan County, Hendricks County, Boone County, Vigo County, Johnson County, Hancock County, and Tippecanoe County, Indiana.