Top Questions Regarding Divorce and Business Valuations (Mediation and Valuation Expert St. Louis)

Описание: Top Questions Regarding Divorce and Business Valuations (Mediation and Valuation Expert St. Louis) http://www.valuationpodcast.com 314-541-8163 Melissa Gragg Bridge Valuation Partners

Hi, welcome to valuation podcast.com, a podcast and video series about all things related to business and valuation. My name is Melissa Greg. I'm a financial expert witness in st. Louis Missouri. During this episode, we will discuss some of the top questions regarding divorce and business valuations. One of the main questions that people need to know or want to know is what we're going to cover today. So there's a handful of questions that business owners typically ask when they are contemplating divorce and they may not have filed. They may not have even discussed it with their spouse. And I want to give you a little bit of information so that you can be prepared if you decide to move forward with this process. So one of the biggest questions we have is how should I run my business? If I'm getting divorced, can I take on more debt?

Can I start a new business venture? And most of the time what everybody is telling the business owner to do while they're getting divorced is to continue to run the business just as you have in the past, not to do anything drastically different not to try to arbitrarily lower the value or increase the value or do anything that will seem visible and evident when you go to trial. So if you need to take on more debt and you have a business reason to do it, then be prepared to defend that business reason for taking on more debt. If you have a new business venture, again, being very clear and open and honest about what that entails, whether it involves marital money, where whether it involves a business money and how that's going to be funded is going to be pretty important. Most of the time as a business owner, who's getting divorced, it's going to be really important to be transparent, and to be upfront with all the information about your business, about what you're doing and the actions that you're taking.

It doesn't mean that you need to ask for permission to do any of these things, but you certainly want to be mindful of the interpretation that certain things could, they could seem different, or they could seem suspect if you're doing them. So as long as there's a business reason, then pretty much you continue to run your business as if you had been doing it the whole time. Another question that we will typically get is how do we split the business or will I have to continue to own this business with your spouse? So traditionally in divorce, divorce is state specific. So that means if you're getting divorced in Missouri, there are going to be certain rules. And if you're getting divorced in Illinois or any other state, there are gonna be other rules. And so you need to work with an attorney and an expert that understands those rules pertaining to businesses in your state.

But traditionally, how do we split the business? One person actually will remain in control and own the business while the other person may receive other property. So let's say you have a business worth a million dollars and you have a house worth a million dollars. It may be that somebody takes the house and somebody keeps the business. So in essence, you're just trying to equal up the assets and try to give each person traditionally a, an equal portion of all the assets. So what happens with the business is it becomes one of the things you own on your personal balance sheet. So you will have houses, cars retirement funds, financial securities, and things like that. And then there will be a line item for the business, and that's where a valuation expert comes in and provides a value for the business and then testifies in court. Typically the court doesn't want a divorcing couple to continue to own the business. Now there are times where a couple are, both of them are involved in the business, and that could be that they both remain as owners, but traditionally that would be something that the parties would have to agree to and convince the judge that that is going to be the best situation for that couple.

So another question that we get is how do you protect some of your investments that you owned before you were married? There's a lot of ways to do this. Most of the time, financial planners get involved around the time that you get married. And so there could be a prenuptial agreement that is put in place that would describe what would happen at any point during the marriage, if it were to end what would happen what would happen to the property? What would happen if somebody needs to pay alimony or maintenance and maybe what would happen with future income prior income, past everything it's usually outlined. The problem with prenuptial agreements is they also have to be fought in court. And so in order to keep them in place, you may have to fight about some of the terms when you get to court.