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Divorce may require a need to place a value on a business

A Texas company owner about to start the divorce process will probably need to determine the value of the business. All assets acquired during a marriage must be divided when the union ends, either by the court, pursuant to an agreement between the estranged spouses or in mediation, and two approaches can be taken to assign a monetary value to a business. They are full valuation and calculation of value.

All forms of businesses, including sole proprietorships, partnerships, limited liability companies and corporations, come under scrutiny when an owner ends a marriage. Factors such as the level of animosity between the spouses and the size and complexity of a business could influence the choice between full valuation and calculation. Full valuation represents the costlier option because it is a lengthy and thorough process. If the spouses mistrust each other or the business is large and complex, a full valuation might be chosen. Its results could be considered the most reliable.

In less contentious cases, a calculation of value could be an appropriate option. This process does not take as long or cost as much as full valuation. The resulting estimate could be sufficient for divorce negotiations to proceed successfully.

A business owner who needs advice about a divorce could contact an attorney. The client's long-term interests might be protected if legal advice guides decisions during a high-asset divorce. An attorney could begin by examining the terms of a prenuptial agreement, if one exists. During negotiations, the financial priorities for the client could be promoted by the attorney. An attorney might also strive to limit hostility during discussions and keep the client focused on making smart decisions.

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