Businesses have value and are considered assets for division pursuant to the equitable distribution law.  Typically, in a divorce, an accountant (or more than one, if each spouse hires his/her own) values the business.  The accountant, among other things, reviews the tax returns, books and records of the business for several years, obtains information from the business owners (both spouses), and accountant of the business and researches similar businesses to establish a number value on the business. Like most experts used in divorce cases, accountants are supposed to be completely objective; however, some of the factors in valuing a business are discretionary and, therefore, different numbers can be produced.

        Once the value of the business is calculated, then it must be determined how the business will be split.  Was it fully acquired during the marriage?  Did both parties build and work in the business together or did one spouse work the business while the other spouse fully care for the home and the children to allow the business to be the focus of the other spouse or some hybrid?  These other factors will determine whether the business acquired during the marriage will be split 50/50, 30/70, 25/75 or some other fraction.  When actually dividing, the business is typically not sold, and usually one party will retain the business and pay the other spouse his/her share of the business either in cash, as a payout over time, or in exchange for some other asset divided in equitable distribution.

        Obviously, if people are getting divorced, they usually do not want to continue working together in the business so there is a payout.  Every once in a while people continue to work together despite the breakup of the personal relationship.

        A great deal of emotion is involved in a divorce.  Sometimes the anger and disappointment is further exacerbated because of the division of a business.  I believe it is a far more prudent and cost effective case if the parties can sit down, either with an experienced mediator or with collaborative lawyers with the accounts to work out an acceptable logical resolution to dividing the business asset in a divorce.

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