Los Angeles Business Divorce Attorneys

Business Valuation

Divorce With a Business Attorneys in Los Angeles, CA

Divorce is a very complicated matter, and it can become even more complex when one spouse owns a business. Understandably, the concept of dividing the value of a business is frequently a hotly-contested issue in divorce. Simply determining the value of a business is a process all on its own that often presents additional challenges. To discuss your situation with a qualified divorce attorney, contact Zitser Family Law Group, APC today.

Determining Ownership of a Business in Divorce

If you are a business owner who is considering a divorce, you must understand how the state of California classifies your business when it comes to dividing property. If your business was started during your marriage, it may be considered community property in the state of California and, therefore, may be subject to division. However, if you started your business before your marriage or after the date of separation, it may be considered separate property. Of course, this determination isn’t always so straightforward, which is why you need strong legal support on your side.

Impacts of Determining the Value of a Business

When one or both spouses own a business and decide to get divorced, it is essential to assign value to the business if it is considered marital property. The owner of the business will be required to provide all financial documents regarding the value, cash flow, and liabilities of the business. Of course, business owners may not be completely truthful in their records, which can require a forensic accountant to step in. If a forensic accountant is asked to examine all of the business records, other major issues may arise, including the involvement of the IRS. When this happens, a business owner may face a slew of additional legal issues that complicate the divorce even further.

Mistakes When Conducting Business Valuation

An unfortunate reality of the business valuation process is that mistakes can be made that may result in detrimental impacts to the owner(s). These can seriously complicate the divorce process, which is why you must know what to look out for. Some of the most common mistakes made in business valuations during California divorces include:

  • Using a valuation method that has not been accepted by the courts, such as the market value method or the discounted future earnings method
  • Using a valuation method that fails to include all of the business’ assets or liabilities
  • Failure to consider unusual occurrences or temporary business value changes
  • Applying income multiples when trying to determine goodwill value
  • Failure to apply minority discounts
  • Failure to adjust goodwill
  • Buy-sell agreements that may be used in certain circumstances


Contact Zitser Family Law Group

If you or your spouse own a business and you are going through a divorce, you need a legal team you can trust to represent your interests every step of the way. The experienced attorneys at Zitser Family Law Group have proudly represented clients for over three decades as they navigate the challenges associated with business owner divorce. Contact the legal team at Zitser Family Law Group today to discuss your situation.

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