Businesses can be effective instruments for tax and retirement planning, but they can cause added complexity and expense in family litigation. It is important to have a lawyer with practical experience in dealing with these matters, who understands various different options for valuing your business, and when a value will be important (which is almost always).
Many people do not realize that the other person usually has some kind of entitlement, both to the money that a business earns (even if it is not on your personal income tax return) as well as the underlying value of the business itself.
Particularly on the issue of value, a valuation by a certified business valuator will be needed if the case goes to trial, and it is still a good idea if it gets resolved by consent to make sure no one tries to come back on a settlement on the basis that they did not receive full disclosure.
All kinds of issues may arise in a valuation or assessment of someone’s guideline income. How much money is actually available for support? How much needs to be reinvested into the company? What happens with real estate amortization? Were certain sources of revenue non-recurring? What is the proper valuation method for a successful business? What is the difference between retained earnings and income?
While the joint expert will provide an opinion on many of these issues, a lawyer who does not understand them will not be able to effectively critique and interpret a report on behalf of his or her client to try and adjust for a report that is too high or too low.
While people have some flexibility with respect to child support, it is not possible to agree to one figure and expect it to stay the same.
While having legal advice is always helpful, it is particularly critical when businesses are involved, especially if the family litigation gets resolved by consent, to make sure that the settlement is fair and will stand up to later legal challenges. LK Law’s business and family law lawyers will ensure you and your business are protected.