How Property Division Affects Tennessee Business Owners in a Divorce

Help for Knoxville families with single and multiple business properties

Divorce is always a bit complicated, even in situations where both parties agree to spit amicably. If you or your spouse own a business, however, those complications can begin to pile up. The appropriate business valuation is necessary to ensure that you retain your fair share of the assets when you and your spouse end your marriage. At LaFevor & Slaughter in Knoxville, we help local Tennessee business owners keep what is theirs by offering meticulously detailed counsel and documentation aimed at protecting their businesses and their futures.

How business valuation works

Your business’s worth is assessed on a number of factors, including the type of business it is. Thus, a sole proprietorship is valued differently than professional practice, a partnership or a corporation. The more people who are involved in the business, the more complicated the division becomes as well. If for example you, your spouse and another couple all opened a business together, the process will necessarily be more complicated than it might if you and your spouse opened a business together.

The IRS offers guidelines for finding the true value of a business. Those guidelines include “three generally accepted valuation approaches…

[T]he asset-based approach, the market approach and the income approach. Consideration should be given to all three approaches. Professional judgment should be used to select the approach(es) ultimately used and the method(s) within such approach(es) that best indicate the value of the business interest.”

Other potential factors in valuing a business include:

  • The history of the business, including when it was formed, what its average earning capacity has been, and what dividends it has paid thus far
  • The current outlook for businesses in that industry or field, located in the place where it exists
  • “The book value of the stock or interest and the financial condition of the business”
  • The risks the business faces

The business valuation process can take a while, and may be further complicated if marital assets separate from the business have comingled with the business assets at any point. This is especially problematic in cases where one spouse has been dipping into the company till for personal reasons, which may be construed as embezzlement under certain circumstances.

When you work with LaFevor & Slaughter, we help you make sense of the asset division process. We offer comprehensive representation and counsel to clients who owned or co-owned business in Knoxville and throughout Tennessee. We aim to make the process as smooth and efficient as possible, and offer custom strategies for the small business owner as well as for the more high-profile client whose personal life may be of interest to business investors and shareholders.

Protect your business during a divorce

LaFevor & Slaughter provides skilled representation to business owners in and our Knoxville, Tennessee. For more information about how we help our clients protect their companies and their futures, please call us at 865-637-6258 or contact our office.