For family law attorneys to properly represent their clients, it’s imperative to have an understanding of business valuations and when they are required. The widely accepted state appointed mandate is that all marital property must be properly valued for equitable distribution. When both parties fail to provide a value for any given property, it is considered to have no value. Failing to value all pertinent property can be not only a disservice to your client but can also represent an act of malpractice. Businesses are one of the many types of property that can often fall through the proverbial legal cracks in property distribution cases.
Sure, certain types of businesses are clearly property that needs to be included for equitable distribution. In instances where the business is a corporation, partnership, or even sole proprietorship, it is usually fairly obvious that it should be valued. Additionally, professional practices, such as law or medical practices, accountants, consulting firms, etc, are normally considered businesses for distribution purposes.
But what about when the profession status of the practitioner is not quite as clear, or to restate the question, what constitutes a professional practice? A requirement of a professional license can be an indicator of professional status but such licenses are not always required for professional status consideration. How about other types of circumstances such as with independent contractors or agents? That’s when things can become convoluted and / or ambiguous. The specific circumstances as well as how they correlate with specific state precedents will determine how they should be handled.
As with most things in life, when in doubt, it’s best to consult with someone who has the knowledge and experience to assist in making the proper decision. A professional business valuator will be able to provide the most current and relevant information to best serve your client.
Please contact us if you have any questions or would like to proceed with a valuation.
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