Business Valuation and Divorce
Often times when a petition for divorce has been filed, each spouse begins to circle the wagons to protect their individual futures and financial self-interests. This becomes a particularly sticky issue when one spouse owns a business. That person (still typically the husband) may try to hide as much of those business assets as possible to minimize their financial losses during a divorce.
Your spouse may report that his business is in trouble, but has his lifestyle changed? During the divorce, your spouse may come to court, hat in hand, claiming that his business has taken a hit of late; but is that true? Is he (or she) still living the same lifestyle despite those claims? If so, one has to ask, where is the money coming from?
Does your spouse’s business pay his personal expenses? If so, he may claim that he actually has “no income” because he isn’t accepting a paycheck. Also, if this is the case, it can appear that the business has taken a hit in both its net income and in its valuation.
Did the business “coincidentally” start to show a decline about the same time as your divorce proceedings began? Or, did the business begin to show signs of trouble as your marriage first began showing signs of trouble? Did the business start to lose valuation when you separated?
In some instances, more crafty business owners will start bad-mouthing their own business’s profitability well in advance if they suspect that that the marriage is on the rocks and may result in a divorce. They may even cut their own compensation or sell a luxury car and buy a compact car to sell the act.
Is your spouse refusing to turn over financial documents? This is often a stalling tactic designed to raise your legal bills, by requiring your attorney to make repeated demands to receive documentation you are legally entitled to. The idea being the sooner you run out of money, the more likely you will settle for less than you deserve.
Determining the valuation of a spouse’s business can be fraught with pitfalls. That is why you should seek the help of a family law attorney from Nottage and Ward in Chicago if you are going through a divorce. We understand what it takes to determine a business’s valuation and we will work doggedly to see that you get a fair and equitable divorce settlement. Call us at (312) 332-2915 or contact us online to schedule a free review of your case.
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