One of the most challenging aspects of a divorce can be determining the worth of a business for the purpose of dividing up the marital assets. This process can become especially tricky if the couple developed or worked in the business together. North Carolina is an equitable distribution state, which means that the court does not merely divide the marital assets in half. Instead, it attempts to find an equitable or fair way to distribute the assets according to several factors, including the contributions of each spouse, the roles of the parties in the marriage as a homemaker or income earner ect., and acts of either party to maintain, preserve, develop or expand marital property. Keeping a clear head and ensuring that your rights are protected can be challenging during a divorce. Our Charlotte and Concord business valuation lawyers are ready to help you understand your legal rights and to ensure that you navigate this process effectively.Business Valuation in North Carolina Divorce Cases
While dividing some assets like vehicles, homes, or personal property can be relatively straightforward in a divorce, determining how a business should be divided or whether one party should receive the business as part of the divorce settlement is extremely complex. It is one of the most technical processes that a couple may need to undergo during a divorce, which is why it is critically important to have an experienced divorce lawyer at your side. In many instances, it is essential to retain an expert to help you come up with a valuation for the business, or to help determine how much value your contributions added to the business’ success and longevity.
In some situations, one spouse has already started or been part of a business venture before they marry. In this instance, the business is technically classified as separate property that belongs to that spouse. If the business becomes more successful during the marriage, the increase in value is classified as marital property, in which the non-owning spouse potentially has a stake. Also, if the other spouse has made contributions of money, time, or support, he or she may have a claim to part of the business. If the non-owning spouse provided important services like childcare while the other spouse worked on the business, that contribution will need to be valued and taken into account in some manner. Our business valuation attorneys can advise Charlotte and Concord residents on how these factors may apply to their situation.
North Carolina courts will consider a number of factors when assessing a business asset in a divorce proceeding. This process is different from how a bank may value the business before it is sold. Only the value of the business is in question, which includes a consideration of how successful the business has been and how well it will do in the future. Risks associated with the business are also taken into account. The court will also consider passive factors, such as the contributions of each spouse to the business’ growth and success. Often times business evaluations require accountants and/or financial analysts to evaluate the business to determine the fair market value of the business and if necessary to testify to their expert opinion on the business’ value.
As part of the valuation, the court will examine assets that the business owns, including buildings, equipment, trademarks and other types of intellectual property, and the intangible asset known as goodwill. This term is used to refer to the value of the business that is not derived directly from its assets but is derived from the synergy among those assets and how the business is able to produce income. The courts also consider whether the goodwill is tied to either of the spouses when determining how to distribute the business. Our Charlotte and Concord business valuation attorneys can help you understand how goodwill may be evaluated. If the business came up with a popular product, for example, the demand for the product and its novelty would be considered part of its goodwill.
A seasoned divorce lawyer can help you understand how these concepts may apply to a business valuation process in your divorce and whether you are entitled to part of the value of the business. Once the court determines a value for the business, it will then determine which spouse is entitled to the business or whether the parties each have a stake in its value.Arrange a Consultation with a Knowledgeable Divorce Lawyer Today
When you are dealing with the emotions and disruption of a divorce, one of the most important things that you can do is ensure that you have all of the appropriate information to understand your rights and obligations. At the Olsinski Law Firm, we have assisted clients throughout Mecklenburg and Cabarrus Counties, including in Huntersville, Matthews, Mint Hill, Cornelius, Davidson, Pineville, Kannapolis, Harrisburg, Midland, and Mount Pleasant. We provide a free consultation with a business valuation lawyer in Charlotte or Concord to discuss your situation. Call our Charlotte office at 704-405-2580 or our Concord office at 704-918-4747, or contact us online.