Whether it’s part of a contentious divorce hearing or to assist a client in selling their business, a valuation is extremely important in determining the value of a business. Understanding risk factors is essential in determining how a business will be valued. Let’s consider what your business-owning clients need to know about company-specific risks and how they come into play when it’s time for a business valuation.
There are many instances when a business valuation report is needed in litigation. During a divorce, if one or both spouses own a business, it may be necessary for the business to be valued for asset distribution purposes. Each party may hire their own business valuation analyst to value the business, and each analyst may come back with very different conclusions as to the value of the business. While differences in value can often be the result of two analysts having justifiable differences of opinion, there sometimes can be something else going on. While most credentialed valuation analysts have high ethical standards, there are some unscrupulous “experts” who will purposefully “rig” their valuation report in order to achieve a desired result in favor of their client. So, how can you spot one of these “rigged” valuation reports?
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When rock star Prince died on April 21, 2016, he didn’t have a will in place. This rather shocking scenario resulted in one of the most complicated probate hearings ever seen in Minnesota, Prince’s home state. Business owners and high net worth families alike can learn from Prince’s mistake by having a proper estate plan in place to minimize tax liability.
A reliable valuation is critical in many different contexts, including private sales, divorce, litigation and estate planning — just to name a few. A frequent challenge in valuing privately-owned businesses involves the treatment of non-operating assets and non-operating liabilities. Attorneys will benefit from having a basic understanding of these nuances of valuation, as they can have a significant impact on the conclusion of value. Let’s look at how the treatment of non-operating assets and non-operating liabilities can impact the value of a company.
The Build Back Better Act (H.R. 5376) was introduced in the House of Representatives on September 27, 2021. If this bill is signed into law, it will have broad implications on estate planning, including changes to the unified credit, treatment of grantor trusts for tax purposes, and surcharges for high income estates and trusts. Let’s take a close look at those major changes.
A business valuation is often required to accomplish various personal, estate or business goals. There are certain life events that require business owners to get a business valuation.