Maximizing Equitable Division in Divorce: The Unseen Value in Business and Intellectual Property Valuation

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Navigating through divorce proceedings is no less than navigating through a labyrinth filled with monsters and riddles at every turn. Amidst the complexities, business valuation often remains overlooked, particularly when the shared assets include a jointly owned enterprise. However, a comprehensive and equitable valuation of such assets can pave the way for a fairer distribution and help plan for future financial responsibilities.

Take, for instance, the case of Rac&*l and Mi*e, whose separation was fraught with disagreements over their savings and investment accounts. The couple was enmeshed in a constant tug of war, battling over the proportion of individual contributions and previously purchased shares. However, they had a realization that transformed their perspective.

They owned a thriving furniture business, a joint venture nurtured over years of hard work. It was this business, not their contested savings and investment accounts, that was their most valuable asset. Suddenly, a holistic valuation of their business became an urgent necessity.

Why You Should Value Your Business and Intellectual Property 

Understanding the true worth of their business was a game-changer. Once they had a proper valuation done, including an analysis of potential revenue from an upcoming contract to license their brand, their conversations shifted. They moved from quarreling over small dollar differences to strategizing on how to divide their assets fairly and amicably. Also, it was very clear that the new licensed brand had been developed by Rach&*l, and Mi*e was happy to acknowledge her contribution, giving her the appropriate value allocation.

Correctly valuing a business for divorce proceedings is no easy task. It requires a deep understanding of the industry, expertise in valuation methodologies, and an impartial viewpoint. This is where professional business appraisers come into play. They delve into the complexities of financial health, market position, potential risks, and projected growth, providing a comprehensive and objective valuation.

They can also help sparse the assets in situations in which one party developed one asset or contributed a specific set of intellectual property (IP). Giving each asset a unique valuation can be beneficial for both parties.

Further, a business isn’t the only asset that might warrant a professional appraisal in a divorce. Real estate, tangible property (like machinery), and intangible assets like trade names can significantly sway the value of marital assets. Real estate appraisers and tangible property appraisers bring the same rigorous evaluation to these assets as business appraisers bring to businesses and business shares.

The Importance of Appraisal in Divorce Proceedings

As divorce attorneys, it falls upon you to safeguard your clients’ interests, and ensuring a comprehensive, professional valuation of all marital assets is a critical part of this. It’s not enough to look at surface numbers; you need to delve deeper. This is where Objective, with its expertise in business and intellectual property appraisals, can assist.

Professional appraisers, like those at Objective, not only help in identifying the true value of assets but also set the stage for a fairer negotiation. By using their services, you ensure that your clients get what they are rightfully entitled to and are better prepared for their new financial futures.

In conclusion, an accurate, professional valuation is more than just a number. It is a crucial element in divorce proceedings when shared businesses and valuable assets are involved. It is a roadmap to an equitable division of assets and, more importantly, a way to plan for a stable financial future. So next time you’re navigating a divorce case involving shared businesses or valuable assets, consider the importance of a comprehensive valuation and how Objective can help. Call us today to discuss how we can bring clarity to your clients’ financial futures.

 

About the Authors

Jordi Pujol, CFA

Director

[email protected]

(213) 282-7910

 

 


Disclosure

This news release is for informational purposes only and does not constitute an offer, invitation or recommendation to buy, sell, subscribe for or issue any securities. While the information provided herein is believed to be accurate and reliable, Objective Capital Partners and BA Securities, LLC make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person.  Securities and investment banking services are offered through BA Securities, LLC Member FINRA, SIPC. Principals of Objective Capital are Registered Representatives of BA Securities. Objective Capital Partners and BA Securities are separate and unaffiliated entities.

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