Business Valuations in a New York Divorce

Divorce is difficult under any circumstances, and it becomes more complicated when a business is involved. If you own a company, it is often the most valuable asset in the marriage, and the one that raises the most questions. How much is it worth? How much of it is subject to division? A professional business valuation answers those questions with figures both sides can rely on, helping you move toward a fair, informed settlement rather than a guess.

At Sun Business Valuations, we help business owners and their attorneys throughout New York obtain clear, defensible appraisals for divorce. Here is a look at how the process works and what to look for in a valuation firm.

How a Business Fits Into a New York Divorce

New York divides marital property through equitable distribution, which means assets are divided fairly, though not necessarily equally, based on the circumstances of the marriage. A business started or built up during the marriage is generally part of the marital estate. A business owned before the marriage may be partly separate, but growth in its value during the marriage can still be taken into account. One of the first steps in any divorce valuation is determining how much of the business is subject to division, which depends on the specific facts and is best reviewed alongside your attorney.

Why Valuing a Business Takes Expertise

A business is not like a bank account with a balance you can read off a statement. Privately held companies sometimes run non-business-related expenses through the business, pay owners more or less than market salaries, and incur one-time or unusual costs that can obscure how the company is actually performing. A credible appraisal adjusts for these factors to show what the business earns.

Beyond the numbers, a thorough business valuation weighs the practical realities that affect value — how dependent the business is on the owner, whether revenue is concentrated in a few customers, the strength of the management team, and conditions in the industry. Each of these can move the final figure, and in a divorce, each can become a point of disagreement. That is why an accurate appraisal calls for an experienced, certified professional rather than a rough estimate.

Keep New York’s Rules in Mind

Some rules in this area are specific to New York and have changed over time. Since 2016, for example, the value of a professional license or degree earned during the marriage is no longer divided as an asset on its own, though a spouse’s contributions to the other’s education or career can still be taken into account. Details like these, along with questions about which date a business should be valued as of, are part of why it helps to work with a business valuation firm that knows how New York treats these issues.

The Goodwill Question

For many businesses — especially professional practices such as medical, dental, legal, and accounting firms — one of the most important issues is goodwill: the value beyond physical assets. A business valuation works to establish the company’s fair market value, what it would sell for between a willing buyer and seller, and goodwill is often the hardest part of that figure to pin down. New York draws a distinction between enterprise goodwill tied to the business itself, such as its reputation, systems, and client relationships that would remain if the business were sold, and personal goodwill tied to the owner. How that line is drawn can meaningfully change the value included in the marital estate. Because it is often a point of contention, it helps to work with a firm that can explain and support its conclusions in plain, understandable terms.

Choosing the Right Business Valuation Firm

Not all valuations carry the same weight, and in a divorce, the quality of the appraisal can shape the entire outcome. When choosing a firm, look for:

• Certification and accreditation — credentials such as CVA (Certified Valuation Analyst) and ASA (Accredited Senior Appraiser) that courts and the IRS recognize.
• Experience with divorce valuations, including the ability to provide expert witness testimony if your case goes to court.
• Familiarity with how business valuations are handled in New York.
• Clear, understandable reports written in plain language, not boilerplate templates.
• A firm that works closely with you and your attorney throughout the process.

How Sun Business Valuations Can Help

Sun Business Valuations brings decades of experience and dual CVA and ASA accreditation to every engagement. We provide independent, defensible business appraisals that are comprehensive yet easy to understand, customized to your specific situation rather than forced into a template. When a matter is contested, our professionals are experienced in providing expert witness testimony. Our goal is to give you the clarity and confidence you need to move forward.

Frequently Asked Questions

Get a Clear, Defensible Valuation for Your New York Divorce

Whether you are a business owner facing divorce, or a family law attorney or financial advisor with a New York client facing a business valuation in divorce, Sun Business Valuations provides the independent, understandable analysis you need. Contact Sun Business Valuations or call Stephen Goldberg, Managing Partner, at 800.232.0180. Initial consultations are provided at no charge.

Sun Business Valuations provides professional business valuation services throughout the United States. Our certified experts deliver accurate, defensible valuations for businesses of all sizes across diverse industries.