When an Illinois couple decides to file for divorce, it will certainly initiate several significant changes in the lives of both parties. While the end of a marriage will change things such as living arrangements and parenting time, it will also have serious impact on the financial well-being of both parties. During this process, you will find it beneficial to be intentional regarding the protection of your financial interests.
The divorce process can be particularly treacherous for people who own a small business. Most of the time, it is impossible to actually divide a business, so there must be careful consideration on how to appropriately divide assets and address business interests. One of the most important steps in this process is seeking an accurate business valuation.
What is a business valuation and why do I need it?
Business valuation is the process of determining the monetary value of a business and its assets. This process considers everything related to the business, including real estate and liabilities. This number should be as precise as possible as it will have a direct impact on your divorce proceedings.
You need an accurate business valuation because you want a fair property division settlement. Whether you are seeking a portion of business assets, or you wish to negotiate for other assets or property in lieu of retaining a portion of the business, a fair, accurate value is crucial.
How is a fair business valuation determined?
Financial professionals and others employ multiple methods and factors in this process. In the effort to determine and appropriate business valuation, the following elements may be considered:
- Financial statements
- Cash flow records
- Future earning potential
- Assets and liabilities
- Plans for expansion
- Company comparisons
You would probably benefit greatly from not walking through this process on your own, but rather take the steps necessary to ensure the complete protection of your financial interests, both now and in the future.
Pursuing a strong post-divorce future
During a divorce, your financial future is on the line. It is prudent to approach matters pertaining to property division with caution and consideration, not allowing emotions to drive your decision-making.
When it comes to your small business, you know the importance of pursuing a settlement that reflects your needs, protects your rights and ensures your share in any business interests. You can take the first step in this process by seeking a complete explanation of your rights and options, even before your file divorce papers.