The Law Office Of Michael A. Troy PLLC

Business Valuation in Divorce

Maryland and Washington, D.C. Divorce Attorney Advises on Business Valuation

Beltway family lawyer protects clients’ interests during property division matters

Divorce can be much more complicated when a spouse owns all or part of a business. To divide marital property fairly, there must be consensus as to the value of specific assets. There are many different ways to assess the worth of a business and conflicts over the proper approach could prevent spouses from reaching census on the division of the marital estate. At The Law Office of Michael A. Troy PLLC, we represent Maryland and Washington, D.C. residents in divorce proceedings, including breakups involving high net worth couples. Our firm’s attorney can examine the situation in your case and consult with experts to reach an accurate appraisal. From there, we will advocate for a resolution that protects your interests and helps you move forward on sound financial footing.

Legal standards associated with the treatment of a business in a divorce

A business created during the course of marriage is considered part of the divisible estate unless an enforceable prenuptial or postnuptial agreement says otherwise. For companies that one spouse owned prior to being wed, the accumulation in value that occurred while the couple was married is subject to equitable distribution. These cases can become even trickier when one spouse owns a closely held business, but the other has contributed to its value by working there full- or part-time. Michael A. Troy is an experienced divorce lawyer who offers insightful counsel regarding the allocation of business ownership shares.

Different approaches to appraising a company’s worth

Every business has some value, but depending on the circumstances, the best way to reach an accurate figure might differ. The three most common ways to determine a company’s worth are as follows:

  • Income — When a company is steadily generating revenue, the parties might agree on a valuation that looks at the income created for the owners over time and use that to project what the value of the business is going forward.
  • Market value — In marketplaces where there are competitor firms, it might be possible to identify the fair market value of a business by looking at sale prices of similar companies. This could be useful in cases where income is not a suitable method of valuation because the company is relatively new or has suffered a downturn for an external reason.
  • Assets — There can also be instances where a business is relatively unique and has not fully realized its income-earning potential, but holds significant worth that should be acknowledged as property is divided during a divorce. Accordingly, assets such as real estate, inventory or intellectual property could be utilized to set a value.

You can rely on us to take a close look at your particular situation to determine the fairest way to appraise the worth of your business asset.

Firm advocates for a fair distribution of marital property

Once an appropriate valuation has been made for a business that is at stake in a divorce, our firm works to negotiate a fair property division settlement. If it is important for you to maintain control of the company, you might wish to compromise on other aspects of an overall deal. In the event that consensus cannot be reached, both Maryland and Washington, D.C. courts allocate marital property based on the principle of equitable distribution. This means that judge decides what is fair based on a review of the relevant factors, and the result does not have to result in equal shares for the spouses. We advocate for a resolution that satisfies your most important objectives.

Contact a Maryland and Washington, D.C. divorce lawyer for a free consultation about business valuation

The Law Office of Michael A. Troy PLLC in Greenbelt advises divorcing spouses in Maryland and Washington, D.C. on business valuation and other concerns associated with property division. For a free consultation, please call 202-864-2296 or contact us online