For North Carolina couples who are going through a divorce, the financial aspects can be particularly worrisome. This is especially the case when the property of the marriage includes a family business that can be difficult to split up using a standard asset division process. Dividing a closely held business can bring with it an array of questions, including establishing a correct valuation, dealing with the business value in relation to other marital assets and handling proper reporting of business-related income.
There are several methods that can be used to establish the valuation of a business, including the market, income and asset approaches. In all cases, the financial statements of the company are analyzed. In addition, during a divorce, if one spouse is less involved in the business, it can be important to do a deeper level of investigation to establish the value. This can include access to the company’s facilities, interviews with management and a full review of financial records. On the other hand, if the business predated the marriage, it could be appropriate to restrict the areas of relevant valuation to the increase in value during the marriage.
Spousal support can be another complex matter in a high asset divorce involving a closely held business. In some states, a person cannot receive both a share in the business as well as alimony calculated on the basis of the ex-spouse’s future income from that business.
People going through a divorce that involves complex property division issues can work with a family law attorney to protect their interests and seek to ensure a fair settlement. The attorney can engage in the discovery necessary to provide a proper valuation of a closely held business, uncover any deceptive behavior and work to protect valuable assets.