A married couple who has decided to call it quits may naturally fight over the property they once shared -- for instance, the marital home and any motor vehicles. However, they also may be in disagreement over how one spouse's business should be divided, especially if the other spouse never stepped foot inside the establishment and maybe never even understood what the spouse actually did as a business. The value of the spouse's business certainly is an asset that can be divided when a couple divorces in Virginia, which is anequitable division state.
Equitable division doesn't mean that a couple's assets, which can include business interests, will be divided equally. However, it does mean that the spouse who had nothing to do with the other spouse's business may still share in a portion of the value of the company. The company's value is determined by using a method deemed appropriate based on the facts of the case.
Some of the possible valuation methods include the market value approach or the income approach. Other options are the book value and adjusted book value methods. Even though the spouse who doesn't own the business ends up being paid for his or her interest in the business, this in no way means that he or she becomes an owner in the business.
A divorce proceeding certainly can be complicated under the equitable division standard in Virginia, especially if one of the spouses has his or her own business. If the couple can negotiate how property and assets are divided, however, they can often avoid court intrusion. In those situations where the two individuals cannot come to an agreement, a court will review the evidence presented and make the final decision for them.
Source: Richmond Times-Dispatch, Business owners and divorce, Christopher H. Macturk, Feb. 3, 2014