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Business Valuation LLC Phone: 304 692 1385 Fax :304 599 7250 Email: bizvaluer@valuellc.com |
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Active and Passive Appreciation
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Divorce and Business Valuation One in six households owns and operates a closely held business. One in two marriages ends in divorce. A closely held business is often the single most valuable asset in the marital estate which needs to be valued in a divorce. Important valuation issues arise when the closely held business needs to be valued and (A) Classified as Marital and Separate Property, and further (B) Increase in business value during marriage needs to be separated between active and passive appreciation. Passive appreciation of separate property of either of the parties to a marriage, or that increase which is due to inflation or to a change in market value resulting from conditions outside the control of the parties, is generally considered separate property which is not subject to equitable distribution. In addition to valuing the closely held business, Business Valuation LLC can help to develop valuation models that split the increase in value between active and passive appreciation. contact us. |