Pennsylvania entrepreneurs who are considering divorce may benefit from thoroughly familiarizing themselves with the valuation of their business. In many cases, their business may be an even more significant asset than their home. If their spouse is looking to get a piece of the company they created, the entrepreneur should have clear in mind potential future growth and the liabilities of their business before going into divorce negotiations.
Even if both spouses are partners, they will still need to understand how much the company is worth in order to see to it that things are divided equally if one partner wishes to buy the other one out. The more knowledge the divorcing entrepreneur has, the less likely it will be that they will take a financial hit during the divorce.
There is value in using the services of an unbiased professional, such as a forensic accountant. Most entrepreneurs have developed an emotional attachment to their business. They have worked hard in growing their business, and anything that is a perceived attack on their business invokes an emotional reaction. This could impede their ability to accurately value their business. A forensic accountant or an attorney may have a more objective view on matters.
When divorce negotiations become heated, it is not uncommon for one partner to try to augment or decrease the appeared value of their business with the goal of getting financial gain. They could hide profits, create fake employees, or not disclose loans, deferred compensation, or other financial agreements that are not known to both spouses. There are a number of tricks that can be played to hide a business’s value. This underscores the importance of consulting with skilled professionals.
When entrepreneurs are going through the divorce process, they benefit from talking to a family law attorney who has experience in high asset divorces. These attorneys may offer their client advice on asset valuation, joint accounts, the division of property, and other situations connected to their divorce.