by Erin Durand Hollis, ASA
Divorce and the Closely-Held
Vermont Business Owner
According to the U.S. Census Bureau, for
individuals under age forty-five, approximately 50% of first marriages for men and
between 44% and 52% of women’s first
marriages end in divorce. The likelihood
of a divorce is lowest for men and women age sixty, for whom 36% of men and
32% of women may divorce from their first
marriage by the end of their lives. Business
owners, of course, are not excluded from
these daunting statistics.
For many married business owners in
Vermont, the business is both the most
valuable and most illiquid asset in the marital estate. Therefore, it is reasonable to
assume that if owners divorce, the business will be an asset that will spark substantial controversy and conflict between
the divorcing parties. Furthermore, without preparation and precaution, the consequences of divorce can have a devastating
financial impact on your client’s business.
If either your client or your client’s business partners are contemplating divorce or
if divorce is imminent, you should consider three very important questions: (1) How
will the divorce affect the business?, (2)
What is to be valued?, and (3) Who should
perform the business valuation?
How Will the Divorce
Affect the Business?
Aside from the obvious emotional impact a divorce may have on your client, the
financial implications on your client’s business can be overwhelming and more than
anticipated. As mentioned, the business
may be the lar