Video Summary:

When a family-owned business or jointly held business is involved in a divorce, determining its value and division is a critical part of the process. Business valuation requires the expertise of a forensic accountant, who will analyze profit and loss statements, accounts receivable, and overall financial records to determine its worth. In some cases, industry-specific experts are needed to assess businesses in construction, hospitality, or other specialized fields. Although the business itself typically remains intact to continue generating income, its assessed value must be fairly divided between spouses, especially if it was established or grew during the marriage.

Video Transcript:

When you or your spouse owns a family business or a business with multiple partners, determining its value is essential in a divorce. The business may have been recently appraised, or one spouse may have received an offer to sell, providing an estimated value. However, in most cases, a forensic accountant is hired to conduct a thorough valuation of the business.

A forensic accountant will analyze profit and loss statements, accounts receivable, and all financial records to determine the company’s worth. In some situations, an industry-specific expert may be necessary—such as in the construction or restaurant industries—to provide a more accurate assessment.

Although the business itself is not divided or dissolved, as it is often a key income-generating asset, its value must be equitably distributed between both spouses. If the business was started and grew during the marriage, it is considered a marital asset and will be factored into the divorce settlement.