Divorce Planning for Business Owners
Divorce when you own a business adds layers of complexity around valuation, income determination, and asset protection. Anew's coach explains in plain English how businesses are commonly valued, what can count as marital versus separate property, and which records to gather.
How Anew Helps
- Understand the three main business valuation methods and which one may apply to your situation
- Learn how courts distinguish between marital and separate business interests
- Learn what to ask your attorney and valuation expert about keeping the business running
- Understand how business income, owner perks, and retained earnings affect support calculations
- Prepare for forensic accounting and know what financial records you will need to produce
Key Features
- Coach explanations of asset-based, income-based, and market-based valuation
- Custom checklist of the financial documents to gather
- Coach explanations of common buyout and offset options
- Coach explanations of personal versus enterprise goodwill
- Asset split estimate using your state's general approach, explained in plain English
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FAQs
Common questions for business owners
Not necessarily. How your business is treated depends on several factors: when the business was started (before or during the marriage), whether your spouse contributed to the business, your state's property division laws, and the specific valuation. Even in community property states, if the business was started before the marriage, only the increase in value during the marriage may be considered marital property.
There are three primary methods: the asset-based approach (what the business owns minus what it owes), the income-based approach (projected future earnings capitalized to present value), and the market-based approach (what similar businesses have sold for). A forensic accountant or business valuation expert typically performs the analysis. The method used can significantly affect the valuation outcome.
Yes. A prenuptial or postnuptial agreement is one of the strongest ways to protect a business in divorce. These agreements can classify the business as separate property, define how appreciation will be handled, and set terms for buyouts. If you do not already have one, a postnuptial agreement can still be executed during the marriage. Consult a family law attorney to ensure the agreement is enforceable in your state.