When a marital estate includes an interest in a closely held business, determining its value for purposes of dividing up assets for a divorce settlement can be challenging. Additionally, part or all of the business may be excluded from the marital estate, depending on state law, legal precedent and prenuptial agreements between the spouses. A business valuation professional can help the parties achieve a fair outcome. 2 components of value The value of a business can be broken down into two pieces. First up are tangible (or hard) assets. Examples include such items as cash, receivables and equipment. Most of these items are recorded on a company’s balance sheet. The difference between the combined market values of tangible assets and liabilities (such as payables and bank debt)...

When divorcing spouses own a private business interest, it complicates the settlement process. The value of a business isn’t necessarily as straightforward as the values of other marital assets. And it’s often impractical to sell the business and split the proceeds, because there may be other owners who aren’t interested in selling and it takes time to sell a business. Plus, the business’s value might be partially excluded from the marital estate, depending on state law, legal precedent and prenuptial agreements between the spouses. Fortunately, a business valuation professional can help you sort through the issues. Tangible vs. intangible value The value of a business can be broken down into two pieces. First up are tangible (or hard) assets, which include such items as cash, receivables and equipment....