When faced with divorce, one component that you must think about is the division of marital assets. Virginia is an equitable distribution state, which means that the courts will divide and award assets between the parties in a way that is “equitable.” When determining what division of assets would be equitable in a given case, Virginia law requires the court to determine the legal title as between the parties, and the ownership and value of all property. A marital business interest held by either you or your spouse is considered an asset, and therefore, will be subject to valuation.
When divorcing parties are business owners, equitable distribution becomes much more complex. Unlike many other assets, the valuation of a business is complicated and requires the help of a financial expert/forensic accountant to get an accurate assessment of the business’ value. In addition to valuing the business, a forensic accountant can be helpful in determining the income of a spouse who is an owner and/or owner of the company.
Often, starting and running a business requires a significant commitment of marital and/or separate capital. The business may provide a significant source of income upon which you and your spouse have relied upon for years. In order to aid in the division of assets, an accurate valuation of the business and determination of income is an important part of the rights that you may seek to protect.
By Kari Jackson, Associate at Hall & Hall