SANDERSON
VALUATION FORENSICS
MA, NY, CT, NH, FL
508-306-3400
305-901-1985
Business Valuation for Divorce in Massachusetts and Boston
Business Valuation Expert for Divorce Cases in Boston and Throughout Massachusetts
When a spouse owns a business, determining its value is a critical step in divorce proceedings in Massachusetts. The business interest is often one of the largest marital assets, and accurately determining its value is essential for equitable division of marital property.
Courts in Massachusetts require a reliable, independent business valuation when dividing marital assets. Divorce attorneys and spouses throughout Boston and Massachusetts rely on qualified forensic accountants and business valuation experts to determine the fair value of privately held businesses.
Whether the business is a professional practice, closely held company, or ownership interest in an LLC or corporation, a formal business valuation is necessary to establish its value for purposes of property division.
Why Business Valuation Is Required in Massachusetts Divorce Cases
Under Massachusetts law, marital assets are divided equitably. If one spouse owns a business interest, the court must determine its value in order to properly divide marital property.
Business valuation is required to determine the value of the business interest, calculate buyout amounts between spouses, establish the value of marital assets subject to division, and provide reliable financial evidence for settlement or trial.
Standard of Value in Massachusetts Divorce: Fair Value
In Massachusetts divorce cases, the required standard of value is Fair Value, not Fair Market Value.
Fair Value reflects the value of the spouse’s ownership interest in the business as part of the marital estate. It does not assume a hypothetical sale of the business. Instead, it determines the value of the ownership interest for purposes of equitable division between spouses.
Using the correct Fair Value standard ensures the valuation complies with Massachusetts law and accurately reflects the business interest being divided.
The Business Valuation Process in Massachusetts Divorce Cases
Step 1: Review of Financial Records
The valuation expert analyzes key financial documents, including tax returns, financial statements, general ledger detail, payroll records, owner compensation, and corporate ownership documents.
Step 2: Financial Analysis and Normalization
Financial statements are analyzed to determine the true economic performance of the business and its earning capacity.
Step 3: Application of Accepted Business Valuation Methods
Income Approach to Business Valuation
The income approach determines value based on the business’s ability to generate earnings using methods such as capitalization of earnings or discounted cash flow analysis.
Market Approach to Business Valuation
The market approach determines value by comparing the business to similar companies that have been sold.
Asset Approach to Business Valuation
The asset approach determines value based on the fair market value of assets minus liabilities.
Step 4: Preparation of a Formal Business Valuation Report
The valuation expert prepares a detailed report including financial analysis, methodology, supporting data, and an opinion of value suitable for litigation or settlement.
Business Valuation Expert Witness Services in Boston and Massachusetts
In many divorce cases, the business valuation expert serves as an expert witness, providing valuation reports, assisting attorneys, and testifying in court when necessary.
Consult a Business Valuation Expert for Divorce in Massachusetts
Business valuation services are provided for divorce cases throughout Boston, Suffolk County, Middlesex County, Norfolk County, Essex County, Plymouth County, Worcester County, and all Massachusetts Probate and Family Courts.
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