When a family business, or a personally-owned business, is a component in Tennessee divorce proceedings, it adds a higher level of complexity to the proceedings. For one, it is important to understand the true value of the business, and that can be difficult to determine clearly. That is because, in addition to the assets owned by the business, the business itself will also have a value, which the business owners may never have thought to consider before.
If the business was created — even if it was merely created by one of the spouses — during the course of the marriage, then it is more likely to be more evenly divided in a Tennessee marriage. However, since Tennessee is an equitable distribution state, the property might not be divided “equally.” A judge may determine that one or the other spouse — for example, the spouse who started, works in and runs the business — should receive a much higher percentage of the business ownership in the divorce.
However, because the business will probably not be liquidated as a part of the divorce, one or the other spouses may want to retain ownership. As such, the spouse who will retain ownership might need to buy out the other spouse’s ownership percentage. This, again, highlights how important it is to accurately evaluate the value of the business in question. The spouse who is buying out the other spouse may seek an appraisal that makes the business worth less, while the spouse who is being bought out may seek an appraisal that values the business higher.
At the Law Office of Steven C. Girsky, we have developed numerous strategies to successfully value a business for our clients in a way that honors and respects our clients’ contribution to the business and rightful marital ownership share in that business. We employ forensic accountants, business appraisers and more to secure our clients’ asset division rights.