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The Challenge of the Valuation of a business interest during a Carlsbad divorce

On Behalf of | Jun 27, 2021 | Professional Practice & Business Ownership

The challenge of the valuation of a business interest during a Carlsbad divorce is quite contentious in most cases.  How do you establish the “community’s” portion of the valuation of a Carlsbad business during a divorce?  There are many ways to position the present value of a business, and as a result, a spouse’s community interest in the business. This can be a complex issue, and requires an experienced divorce attorney who has the expertise and sophistication to understand the nuances involved while working to establish a fair valuation for that business interest.

Here is a recent example:
Q: My husband and his good friend opened a business in Carlsbad during our marriage which he and his friend still operate. The business has grown and they now have many employees. I think it is worth a lot of money but he says it is only worth what is in his capital account because it is a partnership and he only owns a certain percentage. Does the amount on the business books which reflects his ‘capital account’ reflect the value of his ownership interest. He keeps telling me that I signed the tax returns and the amount of his capital account is stated on the tax forms so I have already agreed to that number as the value of his interest in the business. We are discussing a divorce and a division of our marital property and I need some direction. I want to move to Oceanside and get on with my life. Help.

A: The valuation of a business interest during a Carlsbad divorce is not a job for any spouse. If it is a small business you want to be particularly vigilant to assure no false dealing is going on between the two best friend operators of the business. You should carefully scrutinize the books and records. C

Protect your own interests and contact us or call 760-389-3927 to schedule an appointment for a remote or socially distanced consultation with one of our experienced Certified Family Law Specialists.

This is important to protect the viability of the business so the true economic fair market value can be ascertained and equally divided.  We work with a forensic accountant to help ascertain the cash flow available for determining and paying expenses such as child support and spousal support. There are some special rules and definitions as to ‘fair market value’ when involved in a divorce in San Diego County.

Our Certified Family Law Specialists know the valuation of a business interest during a Carlsbad divorce can be challenging and even contentious.  We work to establish a fair valuation and prepare the case so you are not deprived of the benefit of your one half of the business value of the community interest in the business.