Determining Business Assets In A Texas Divorce

Getting a divorce in Texas is often a fairly straightforward process. This can change, however, if there is business or family business involved in the case. These types of divorce actions are often the most complex to handle and just as often require the skills of a Dallas complex divorce attorney in order to protect your rights as the property is divided. O'Neil & Attorneys in Dallas, has a staff of highly experience and knowledgeable professionals who are ready to assist in these complicated divorce proceedings. They can assist in all facets of the process including one of the most critical which is determining what property is community property and what is not. In terms of business assets, one of the most important challenges in valuing business assets is first determining whether a business is community property. This determination is crucial as it can be the difference between thousands, or even millions, of dollars to spouses and their families. It is not uncommon for one party to believe that the business is an asset and is therefore not eligible to be divided as part of the divorce. Issues that took place during the marriage such as refinancing a loan or debt, change in business entity, incorporation, and such can lead to the business being converted to community property. For some couples, this can be devastating, especially if the business is a family business that has been in operation for a long time. Under certain conditions, the business can be subjected to division in a divorce. For some businesses this can literally put them out of business if the ownership issue becomes unworkable. An experienced Dallas divorce attorney can explain these conditions in detail. One of the best ways to approach such valuation is to work with an independent business appraiser—a CPA with an Accredited in Business Valuation (ABV) credential or a certified professional, like a Certified Business Appraiser (CBA) or someone recognized by the American Society of Appraisers (ASA). This type of expert can begin the valuation by obtaining all business books and records, tax returns, and financial statements and reports for at least the last five years. By using this data, the appraiser can determine the company's intangible and tangible net assets, an appropriate rate of return for them, and can calculate excess earnings in accordance with various accepted methods. These findings can then be used to establish what is known as the "goodwill" value. This is the amount of earnings left over after taking into account normal costs and return on assets and salaries. There are two types of "goodwill": commercial and personal and each have its own set of criteria. Both, however, can have an impact for divorce purposes. As you can see, valuing and dividing business assets during a divorce can become challenging. For this reason, many couples who own businesses choose to work with a professional Dallas divorce attorney who is skilled in these matters. Protecting your rights and ensuring a fair distribution of community property is what O'Neil & Attorneys of Dallas do best.