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When a marriage ends and a business is involved, one of the first questions asked is: “What is my business really worth?”
For many business owners, their company isn’t just an asset—it’s a source of pride, income, and identity. But in a divorce, business valuation must be approached objectively and within the legal framework of fair market value. This is where confusion often arises: what the business is personally worth to the owner is rarely the same as what it's worth on paper—or in court.
At Strong Tower Valuations, we help attorneys and business owners understand the difference between personal value and fair market value during divorce proceedings. This clarity is essential for reaching equitable settlements, protecting financial interests, and avoiding costly legal disputes.
Fair Market Value: The Legal Standard in Divorce Valuation
Most jurisdictions use fair market value (FMV) as the standard for valuing a business in divorce. FMV is defined as:
“The price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts.”
This standard assumes:
- The buyer is not related to the seller
- Both parties are reasonably informed
- The transaction occurs under typical market conditions
Fair market value does not consider emotional attachment, legacy, or personal reliance on the business. It’s a neutral, objective assessment based on facts and market behavior—not feelings or future hopes.
Request a Consultation to determine the fair market value of your business in a divorce context.
Personal Value: Why It Often Feels Higher
Business owners often see their business through a different lens. They’ve built it from the ground up. It may provide their lifestyle, employ family members, or represent decades of sacrifice. This creates a strong emotional and financial attachment.
In practice, personal value might include:
- The owner's expected future income from the business
- Pride in what the company represents
- Unique, non-transferable relationships with customers or employees
- Long-term plans that haven’t materialized yet (e.g., expansion, selling, franchising)
While these factors are very real to the owner, they may have little or no bearing on what the business would sell for on the open market—which is what courts care about in divorce cases.
Common Gaps Between Fair Market Value and Personal Perception
Here are a few examples of where the gap between FMV and personal value often shows up:
1. Owner Dependence
You may believe your business is thriving, but if its success depends entirely on your personal involvement, a buyer would consider that a major risk—and discount the value accordingly.
2. Non-Transferable Goodwill
Clients may be loyal to you, not the business itself. If goodwill is tied to the owner personally, it’s often excluded or discounted in FMV calculations.
3. Optimistic Future Projections
Believing your business will double in the next five years doesn’t increase current FMV. Valuation relies on historical performance and reasonable projections—grounded in documented growth, not aspirations.
4. Emotional Attachment
Your business may feel like “part of the family,” but courts don’t assign sentimental value to assets. Valuation must remain objective and professional.
Request a Consultation to gain a fair, objective understanding of what your business is truly worth.
How Fair Market Value Is Determined in Divorce
At Strong Tower Valuations, we follow a structured, court-accepted process to determine FMV. Our divorce-related business valuations typically include:
- Financial normalization – Adjusting for personal expenses, owner perks, or one-time events
- Application of valuation methods – Income, market, and/or asset-based approaches
- Consideration of ownership control, liquidity, and marketability
- Detailed reporting – Clear, defensible, and designed to hold up in court
We also provide expert witness support and rebuttal analysis when needed, helping ensure that the valuation process supports—not hinders—the legal resolution.
Why a Certified Valuation Professional Matters
Divorce cases can be emotionally charged and highly contested. Judges expect valuation reports that are:
- Prepared by credentialed experts (such as CVA, ABV, or ASA)
- Independent and unbiased
- Fully documented with support for all assumptions
- Consistent with established professional standards
Attempting to estimate value without this level of detail and credibility can put you or your client at a serious disadvantage during litigation or negotiation.
Bridging the Gap with Clarity and Facts
At Strong Tower Valuations, we help bridge the emotional and legal gap that often arises during divorce proceedings. Our role is to provide clarity, reduce conflict, and equip attorneys and business owners with the facts they need to move forward with confidence.
Whether you're negotiating a settlement or preparing for trial, we deliver valuations that reflect the reality of the market—not just assumptions or expectations.
Request a Consultation to start the process with a valuation firm trusted by attorneys and courts alike.
Rochester, NY Business Valuation Services
The value of your business during a divorce is not based on what it means to you—it’s based on what it’s worth to a willing buyer under fair market conditions. Understanding this distinction is critical to protecting your interests and achieving a fair settlement.
If you're navigating a divorce and need clarity on business value, Strong Tower Valuations is here to help.
Request a Consultation today to work with a valuation expert who understands the difference between personal pride and legal value.
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