A family or closely held business can be difficult to value and divide in an Arizona divorce. The two issues that many couples face are: 1) determining what percentage, if any, of the business is community property; and 2) valuing the business.
At the law firm of Singer Pistiner, P.C., in Scottsdale, Arizona, our divorce law attorneys have extensive experience helping clients resolve disputes over family and closely held businesses. We offer a free initial consultation to discuss your case.
Is the Business Community Property?
The first issue in dividing a business is determining whether the business is community property, separate property or a blend. The answer isn’t always clear cut. Even if the business was owned prior to marriage, there could be a community interest if the value of the business increased during the marriage. How this community interest is valued is a legally complicated matter that would need to be addressed.
How Are Closely Held or Family Businesses Valued?
Determining the value of closely held business can be difficult. If the value of the business lies primarily in the owner, the business may not be marketable — and as a result may not have value.
Here are some questions to determine the marketability of a family or closely held business:
- Can someone other than the owner operate the business and produce revenue? If the operating spouse is crucial to the operation, the business may have far less marketability and therefore, far less value.
- Does the business have sufficient good will so that someone else can take over the business and derive income? If so, the business may have value.
Business valuation experts typically charge a minimum of $5,000 to value a family or closely held business. Our attorneys will help you assess whether it is worth the expense of obtaining a valuation in your case.
Family Business Division in Scottsdale, Tempe, Chandler and Mesa
If you’d like to know more about family business valuation and divorce, please feel free to call 602-264-0110 or send us an e-mail to schedule a free initial consultation. From our office on Camelback Road, our lawyers represent clients throughout the Scottsdale metropolitan area in Arizona.