Dividing marital estates is often a challenging and contentious process in Texas and around the country, and reaching an amicable settlement can be especially difficult when one of the most valuable assets involved is a family-owned business. Determining the value of a private business is rarely a straightforward process, and people who are not involved in day-to-day operations may believe that the companies run by their spouses are worth far more or far less than they actually are.
The value of a privately owned business is determined by assessing its assets, income and markets, and most of the figures needed to perform these calculations can be found in a company's ledgers and other financial records. However, spouses not involved with business operations may be wise to go further to ensure that assets are not being hidden and all income is being reported. This could be done by visiting company facilities, speaking with workers and managers or calling in an expert.
The laws regarding private businesses are not as strict as the regulations that apply to publicly traded companies, and spouses who operate them may take advantage of this by claiming personal costs, such as attorney and accountant fees, as business expenses. This kind of behavior can raise the attention of the Internal Revenue Service and lead to audits for both spouses.
Experienced family law attorneys may tread very carefully when dealing with private businesses in high asset divorce cases and the subject of spousal support comes up. In Texas, some of the value of the business is set aside as personal goodwill to prevent double-dipping, which occurs when alimony is based partly on the value of assets that the payer no longer owns. Putting a figure on personal goodwill and enterprise goodwill, which is the value that alimony is based on, can be a delicate process, and attorneys may call upon experts or suggest alternatives such as mediation when traditional negotiations are deadlocked.