Choosing the correct attorney is even more critical if a business is involved in a divorce. It is such a complicated area that inexperience or inattention to detail can spell financial disaster for either spouse.
New Jersey courts take a very broad view of property subject to claim in a divorce. Things like the marital home, retirement funds and bank accounts are traditionally divided; however, a business interest is treated as a different kind of asset for many important reasons.
First, our NJ statute presumes that both spouses make economic and non-economic contributions to the creation of wealth in a marriage. A spouse who serves as a homemaker or primary custodian of children is considered to be an equally important partner to the other spouse working fifty or sixty hours at the business. This is the longstanding philosophy of the law.
Next, businesses are valued in a divorce. If a legitimate, recent offer to purchase was made, this is likely a good place to start for determining value. But some offers are whimsical or done as a strategic purchase – to put the business out of commission so that another can thrive. Offers to purchase are not always reliable for more than one reason.
The legal system relies on CPAs who are trained in business valuation. They vary widely in experience and reputation. Once engaged, they investigate all information and apply professional standards in arriving at a value. But their engagement is an art, not a science. They have significant discretion when selecting different methodologies and factors in assigning value. Two equally qualified experts can be tens of thousands or even hundreds of thousands of dollars apart. A matrimonial lawyer needs experience and wisdom in this area of matrimonial law when dealing with experts.
The tax laws are constantly changing and have a huge influence on value. Both the attorney and CPA must be up to date. A business may also face future tax liabilities upon sale which can impact present value.
There is no substitute for experience. A firm with dozens of years’ experience handling divorces with businesses has a point of reference to judge values established by the CPAs. The experienced firm has likely handled cases with similar businesses or professional practices many times, which permits them to quality control the opinions as to value.
Hopefully, the above will be helpful to you when selecting your matrimonial attorney.
