Depending on each spouse’s perspective, business valuation in a divorce can lead to sticker shock, disappointment, or both. The business operating spouse (who wants to keep the business after the divorce) usually wants the business to have a lower value, so they can be awarded both the business as well as other marital assets. The other spouse generally wants the business valued higher, so they can receive a larger portion of the other assets or, better yet, all of the other assets plus a buyout for the value of the business exceeding the value of all the other assets received.
A business is valued based on its fair market value. Fair market value means the amount that would be paid in cash by a willing buyer who desires to buy, but is not required to buy, to a willing seller who desires to sell, but is under no necessity of selling.
