How is a family business divided in a divorce?

UPDATED: Aug 24, 2011

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How is a family business divided in a divorce?

My wife has a hair salon which is in a building we own. She has about 5 people working there and paying rent. She brings in about $75,000 a year from the business. I also have a job with a different company making around $65,000 a year. If we divorce, how will the value of the business be divided?

Asked on August 24, 2011 North Carolina


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

In any martial dissolution, there are numerous issues that need to be resolved as follows: 1. dissolution of the marriage, 2. dividing up the assets and liabilities, 3. spousal support, 4. child custody, 5. child visitation.

In dividing up assets of the marital community, the parties generally agree upon an appraiser to value real property and any business as of the date of separation. The appraiser then draws up a report with the valuation of the the assets of the marital community including the family business.

In valuing a family business, an appraiser looks at comparables, income, and replacement issues and comes up with a valuation based upon one or a combination of all three factors. An ongoing business is typically based upon an income approach by the appraiser.

In dividing up the assets of the marriage, generally the spouses agree to take certain items and any disparity in value is equalized with other items.

Good question.


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