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Experts relied upon to value businesses in divorce

In any Texas divorce case where a business is an asset, one of the primary questions is when the business was begun. Texas is a community property state, so a business that was begun prior to the marriage will be treated differently than a business begun after the parties had married. Generally speaking, the presumption is that each party will receive 50 percent of the value of the business or of the amount its value increased during the marriage.

Divorce attorneys often employ valuation experts to put a value on the enterprise. In many cases, independent valuation experts are hired for the same purpose. The experts examine tangibles like gross income, accounts receivable and total asset value, as well as intangibles like goodwill and intellectual property. Goodwill is often broken down into two separate components. Personal goodwill, as a doctor may have who runs a solo practice, may be treated as a separately-owned asset. Enterprise goodwill, roughly, is the value of the business if the parties did not work there.

If the business was begun prior to the marriage, the expert will be asked to value the company as of the date the parties were married and again as of the filing of the divorce petition. Any increase in value due to either party's efforts during the term of the marriage is generally divided equally.

If the business was begun during the marriage, the parties are usually limited to three options: continue to share ownership, sell the business and divide the proceeds or a buy-out of one party by the other. An attorney with experience in divorce law may be able to help a client approaching or during divorce by examining assets and preparing a strategy for property valuation.

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