Evaluation of Business Assets and Commercial Holdings in a Divorce
If own a business and are going through divorce proceedings, the business can be considered a marital asset and split accordingly. However, allocating a fixed monetary value to an enterprise or commercial holdings is challenging. To divide these fairly, the court needs evidence of their existence and how much the business is worth.
There are a few ways a business or property can be assigned a monetary value as part of a divorce judgment. Some of them include:
The Market Approach
This approach for evaluating a business compares it to other enterprises, which follow a similar work model, as well as prospects. This includes client relationships and community contributions.
The Income Approach
This process evaluates existing and forecasted earnings of a business to determine its value. These results are important in determining child support and spousal maintenance amounts.
The Asset Approach
This approach assigns a value to a business by subtracting its depreciation value from its total assets. This strategy is usually employed for small business holdings and in case one of the spouses owned the business before the marriage.
To understand which approach will suit your requirements, you need to understand state laws regarding property. In Illinois, a property must be divided as either marital or non-marital property. The former refers to items or businesses acquired pre-divorce, while the latter is the property owned by a spouse before the marriage.
It may seem obvious non-marital property or business should go to the spouse it belongs to; however, things get a bit complicated here. A business is not like a car or furniture, meaning the value of the business grows and declines, incurs debt and acquires capital and investments – much like commercial properties. Most of what happens to it during a marriage makes both spouses entitled to an interest.
Some things that can be counted as marital property and divided equally include business interests acquired during the marriage and discrete assets acquired by a non-marital enterprise during the marriage.
Dividing a business and properties in Schaumburg, Illinois, can be a monumental task because of the intricacies involved. With years of experience in business and asset division in divorce cases, the Law Office of Fedor Kozlov will not disappoint. Our attorneys are well-versed in state laws and will ensure fair divisions.