If you own a business, it’s natural to wonder whether you should have it valued before filing for divorce. Many business owners assume getting a valuation early will put them ahead of the game.
In my experience, that’s usually not the first step I recommend.
Every case is different, but in many business-owner divorces, it’s better to first understand the legal issues, identify the information that will be needed, and then determine whether a formal valuation is appropriate.
Why I Generally Don’t Recommend Getting a Valuation Before Filing
A business valuation can be expensive, and it may not answer the questions that ultimately matter in your divorce. The scope of the issues often becomes clearer after the case begins, financial information is exchanged, and your attorney develops a strategy.
Paying for a valuation too early may mean spending money on work that later has to be updated or supplemented.
Forensic Accountants Often Become Part of the Process
In many complex business-owner divorces, we work with experienced forensic accountants. Their role may include:
-
Analyzing financial records
-
Evaluating business income
-
Tracing assets
-
Reviewing accounting issues
-
Assisting with business valuation questions (when appropriate)
Not every case requires a forensic accountant, but when one is needed, involving the right expert at the right time is usually far more valuable than rushing to obtain a valuation before anyone understands the full picture.
Start by Organizing Your Records
One of the most productive things you can do before filing is organize your financial records. Documents that often become important include:
-
Tax returns
-
Profit and loss statements
-
Balance sheets
-
Payroll records
-
Operating and shareholder agreements
Good records help your legal team and any retained experts evaluate the case efficiently.
Don’t Try to Get Ahead by Changing the Numbers
Some owners believe they should delay income, accelerate expenses, or make other accounting changes before filing. That approach can create significant legal and credibility problems.
Honest financial disclosures and sound legal advice are almost always the better strategy.
My No-BS Advice
Don’t spend thousands of dollars on a business valuation just because someone on the internet said you should.
Meet with an experienced California family law attorney first. Together, you can decide whether your case calls for a forensic accountant, a business valuation, or another strategy. The right timing can save both money and unnecessary headaches.
Frequently Asked Questions
Should every business owner get a valuation before filing?
Generally, no. The appropriate approach depends on the facts of your case.
Who decides whether a forensic accountant is needed?
That decision is typically made after evaluating the business, the issues in dispute, and the overall strategy.
What should I do before my consultation?
Gather your key business and financial records so your attorney can better evaluate your situation.
Talk to Finan Family Law
At Finan Family Law, we represent business owners, entrepreneurs, executives, and professionals throughout Torrance, the South Bay, and Los Angeles County. When a case involves a closely held business, we work with trusted experts when appropriate and develop strategies tailored to the specific facts—not one-size-fits-all solutions.