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My wife owns a small business and wants a divorce

Janesville, WI |
Filed under: Divorce Business

my wife owns a small business and we are getting a divorce , she says that because the business doesn't make any "profit" as shown on our taxes that it is worth nothing and can't be put under her assets . we are using a prose instead of lawyers do to money issues on both sides . i was looking at fair market value as a way of pricing it but i'm not sure . she is animated about not putting it on the papers . what can i do ?

the business is a small dance studio and due to her mishandling of income from the studio it is in the red . she owes saleries to teachers . and racked up considerable credit card debt .

Attorney Answers 6


if it has assets (product, vehicles, a building ect) it is worth something; however, getting it properly valued can be rather expensive and frankly without a lawyer, getting it valued won't help at all if you are doing it by yourself.

In accordance with the Avvo community guidelines, this communication does not constitute "legal advice", nor does it form an attorney-client relationship. You should seek counsel in your geographic area regarding any specific questions.

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Profit is not the only way to value a business, and pro se is a way to mess up a complicated divorce.

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You must list the business on your Financial Disclosure Statements because you are required to make full disclosure to both yourselves and the Court. Otherwise, there is a basis to reopen. Valuations of businesses are not just by profits, depending upon the type of business. Inventory, equipment, accounts receivables and other assets are also included in the value. You are making a big mistake in not being represented by an attorney in a divorce when there is a business in the marriage.

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I practice in Rock. There a lot of how you move forward will depend on the judge you have. Normally you have the right of formal discovery but some Rock judges won't support it. In the Pre-trial hearing the court will allow you to ask for appraisals using Beloit Action. I suggest you do so. They will put dollar amounts to the business and personal property. If the business isn't bring in anything it might be hard to do much beyond that. If it is then the value would be (usually) 8 years of positive income plus the property itself. So you need to look over all the taxes, all the checkbooks and try to determine the cashflow of this business. To do so, you need formal discovery.

If you would like a free consultation then contact my office, and I will try to give you a more detailed opinion.

WALWORTH, ROCK and JEFFERSON County Divorce/Family Law Attorney - Atty Richard Missimer does answer questions on Avvo strictly to be helpful but these do not constitute legal advice. These answers do not establish an attorney/client relationship. If you would like my help and are within my practice area, contact me at (262)565-8200 for a FREE CONSULTATION.

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The business is either an asset or a liability. Either way, it must be listed on the financial disclosure. You don't describe what sort of business it is. Putting a value on a business-- especially a personal services business such as consulting, medical, or law practice--- can be very difficult, and it usually requires an expert witness. It sounds like you have assets and, if so, you are making a mistake by proceeding pro se. You should find a family law attorney.

This answer is for informational purposes only. By answering this question, no attorney/client relationship is created. Although the legal information is accurate, it may not be appropriate for your situation. The best way to handle any legal problem is to seek the advice of an attorney.

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Each business is different. While it may be true that the business has "no value," now is the time to find out. A full business valuation can certainly be expensive, but a less expensive option may be to retain an accountant to do a quick look over the business profit & loss, asset/debt statements, and tax returns to determine its profitability. At least then you can have a general idea whether to look into it further. Not a perfect solution, but one that may be worthwhile.

I really think you need a lawyer for this case. There are so many other questions: is she earning income? If not, why is she keeping the business going? If the business has debts, is she (or you) personally liable? There are a lot of consequences that could come back to bite you later if you try to do this without a lawyer, and do not address the issues carefully in your divorce judgment.

This submission is not, nor is it intended as, legal advice. You should consult a lawyer to address your legal issue.

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