The Importance of a Business Valuation and an Experienced Family Law Attorney
Ten years into the marriage, your spouse comes to you tired and cranky and declares that he wants to start his own business. You know you look surprised on the exterior but on the interior your stomach is doing somersaults.
He explains that he is tired of working for someone else and padding the pockets of an unappreciative tyrant. He knows he can be successful in his own adaptation of his career choice. Trying not to hyperventilate you squash your feelings of nausea and try to smile supportively.
He continues to verbalize his business plan while you calculate the monthly budget and balance of each child's college fund in your swirling mind. What were those vows, for better or worse?
You force a smile, provide encouragement and mumble, “ok, partner, let's go for it!”
According to a recent article in Forbes Reinventing America series, employees are now becoming the employers or members of the 1099 society. An increase of 14 percent since 2001.
So you resign from the PTA, cancel your gym membership, and while stashing a modest weekly nest egg contribution from the grocery coiffures, you join his side to help build his dream and the new family business. You are now a partner in a family-owned business. Hold on tight!
And believe it or not, it worked. All is going well, until - “Honey, this is not working, I want a divorce.”
You stifle the primal scream inside and manage to mutter, “time for a business valuation”.
During the course of divorce discussions between a couple who sacrificed many a day and night to succeed in their own business, a business valuation can be a time consuming process. To best determine the direction the divorce will take in terms of the business you have built together, consider the following:Hire a professional business appraiser.
Choose a certified or accredited appraiser, preferably one that is familiar with your type of business.
Gather all financial records, tax returns and any piece of paper that is remotely accountable for all your years of blood, sweat and tears. Establish and provide for all tangible and intangible assets owned by the business.
Discuss with your appraiser which direction to take should the business be evaluated on a market, asset or income approach. A market approach compares your business to a similar operating business. The asset approach reviews all assets and liabilities of the business. The income approach analyzes cash flow and profitability.
Fair Market Value
This is important. This step calculates any increase or decrease in value of the business during the course of the marriage and impacts the outcome of marital property division.
One option is to decide to continue as partners, but only in the business sense. Another option is divide and conquer or sell the business and share the profits. And lastly, you can choose to have one partner buy out the other.
Determining which outcome will work for you and your spouse both professionally and personally weighs heavily on information gathered by other professionals. If you have yet to contact an experienced Illinois divorce attorney, it is in your best interest to do so.
Your situation requires an attorney who is familiar with the business valuation process and has a strong business background. Attorney Doug Warlick of The Law Offices of Douglas B. Warlick & Associates, serving Geneva, Illinois has served as counsel to many area business and corporations and is experienced in the techniques used by professionals conducting a business valuation. Combined with experience and strong relationships with local accountants and financial experts, Attorney Walick can assist with compiling a strong case to protect both your business and personal assets.Contact our offices today to schedule your discounted initial consultation today.