Selecting a Business Valuation Expert for Your Divorce

In a typical divorce, most people understand that property and assets such as houses, jewelry, and financial accounts are divided between spouses. However, if a marriage involves ownership of a business, the division of the parties’ respective ownership interests in that business also become a fiercely contested issue.

Dividing a business in a divorce gained tremendous attention when Amazon founder and CEO Jeff Bezos and his wife MacKenzie Bezos announced their divorce earlier this year. Undoubtedly, the Bezos divorce involved complex issues regarding the valuation of their business interests in Amazon, requiring the expert services of a business valuation expert. This article examines crucial considerations when selecting a business valuation expert in a divorce.

Dividing Businesses in a Divorce

When issues regarding the community property interests in a business arise in divorce, the court is required to characterize it as either community or separate property and determine the practicality of dividing any community interest in it. Demonstrating that a business is a spouse’s separate property requires proof that the business was acquired or started either before marriage or using separate property capital.

Dividing community interests in a business often requires an examination of its historical growth. This may necessitate establishing a timeline of the business’ value and conducting a sophisticated analysis of individual transactions and assets.

Major Considerations for Selecting a Business Valuation Expert

Mistakes in the valuation of your business can cost you a substantial amount of money in your divorce. Therefore, the importance of selecting a reputable and reliable business valuation expert cannot be exaggerated.

When selecting a business appraiser, you should consider the following factors:

  • Reputation – a good business valuation expert should have an established reputation in their field and among the legal community. An appraiser should have a good reputation with the court and opposing counsel to minimize the likelihood that their conclusions will be challenged.
  • Knowledge – a reliable business appraiser should have a demonstrated comprehension of how the law will affect the valuation of your business.
  • Experience – an effective business valuation expert should have comprehensive experience in appraising businesses in the context of divorces, covering businesses of varying degrees of sizes and complexity in operations. At a minimum, your expert should have experience evaluating the type of business you own.
  • Communication ability – your appraiser should have the ability to relay their conclusion to you effectively. For example, a competent business appraiser should be able to simplify critical issues in a way that is easily digestible for your understanding. Their ability to extricate themselves from technical jargon to communicate complex concepts to you and the judge will be invaluable to your cause.

Get Reliable Legal Counsel from Moshtael Family Law

If you are going through a divorce involving high-value assets, including a business or professional practice, you should not settle for anything less than excellent legal representation from a legal team who is dedicated to protecting your rights and interests. At Moshtael Family Law, we have over 17 decades of combined legal experience litigating divorces of varying degrees of complexity. We have the skill and sophisticated understanding of California family law and business matters to help ensure that your property interests are effectively preserved.

For a free consultation about the nature of your case, call Moshtael Family law at (714) 909-2561 or contact us online today.