Valuing a Business in a Utah Divorce Case

If you or your spouse owns a business and you're going through a divorce in Utah, determining what that business is worth, and how it should be divided, can be one of the most complex and contested parts of the case. Business valuation requires a mix of legal judgment and financial analysis, and the outcome can significantly impact your future financial security.

This post explains how Utah courts approach business valuation in divorce, what methods are used, and how you can protect your interests.

Is the Business Marital Property?

Before valuing a business, the court must determine whether it is marital property, separate property, or a mix of both. Generally, a business is considered marital property if:

• It was started during the marriage

• It grew or gained value during the marriage due to marital effort or investment

• Both spouses contributed to it directly or indirectly

Even if the business was started before the marriage, a portion of its value may still be subject to division if it appreciated during the marriage or was supported by marital assets or labor.

Methods of Business Valuation

Courts may rely on expert witnesses—usually certified business appraisers or CPAs—to determine the value of the business using one or more of these common methods:

1. Income Approach
This method calculates the present value of the business based on projected future earnings. It's often used for service-based businesses or those with consistent revenue.

2. Market Approach
This approach compares the business to similar businesses that have recently sold. It's useful when market data is available and reliable.

3. Asset Approach
This method calculates value by subtracting liabilities from the total value of the business’s assets. It’s commonly used for businesses with significant physical assets.

Each method has strengths and weaknesses, and the right approach depends on the nature of the business, its records, and the availability of comparable market data.

Goodwill and Personal vs. Enterprise Value

In Utah, courts recognize the concept of goodwill, the intangible value of a business’s reputation, client base, or brand. Goodwill may or may not be divisible depending on whether it is tied to the business itself (enterprise goodwill) or to the individual owner (personal goodwill).

Enterprise goodwill is typically included in the marital estate, while personal goodwill is often excluded. For example, if a dentist’s practice depends solely on their personal reputation and cannot be sold without them, the goodwill might not be divisible.

Valuation Date and Financial Disclosures

The timing of the valuation can affect its outcome. Courts typically use a valuation date that is fair and equitable, which may be:

• The date of separation

• The date the petition was filed

• A date closer to trial

Both parties must also exchange complete financial disclosures, including business tax returns, profit and loss statements, balance sheets, and records of ownership interest.

How Businesses Are Divided

Once the value of the business is determined, the court must decide how to divide that value equitably. Options may include:

• One spouse buying out the other's interest

• Offsetting the business value with other marital assets

• Selling the business and dividing the proceeds (rare)

If the business owner intends to keep the business, they may be required to pay the other spouse a lump sum or structured buyout over time.

How Jeremy Miller Can Help

Business valuation is one of the most complex issues in Utah divorce cases. Jeremy Miller works closely with valuation experts and financial professionals to ensure the true value of your business is presented to the court. Whether you own the business or your spouse does, Mr. Miller can help you understand your rights, challenge inflated or deflated valuations, and reach an outcome that protects your long-term financial interests.

Need Help with a Divorce Involving a Business?

If your divorce involves a business, whether large or small, experienced legal counsel can make a critical difference. Jeremy Miller helps clients throughout Utah County and Salt Lake County handle complex property division, including business ownership and valuation.

Schedule a consultation today to discuss your case.

Related Services:

• Divorce Representation

• Property and Debt Division

• Financial Disclosure and Asset Review

• Business Valuation Support