Sarah Walker: Hi, I’m Sarah Walker. I’m a lawyer with the Family Law team here at Turnbull Hill Lawyers. Today I’ll be talking about businesses in family law property proceedings. Not the most interesting of topics but quite an important one, particularly where the business may have significant value.
In any family law property matter, it is critical that all assets and liabilities be identified. A lot of assets and liabilities are quite easy to determine the value, for instance, a bank account or the value of a car. Where there’s a business involved, this can be somewhat more complex, for instance, it will depend on the type of business. For example, we may have a sole trader where one party of the relationship is the business. It may be, for example, a lawn mowing business.
The business is normally determined by the assets the business holds. If it holds very minimal assets, therefore, the value of the business may be easy to determine. Where there’s a partnership, it might be quite easy to determine the value without a formal valuation. On the other hand, where we have a complex company structure that involves trusts or has excessive assets, it may be critical to get a formal valuation. What is a formal valuation in relation to a business in family law property proceedings? There are rules within the legislation that determine with valuations a joint expert valuation is preferred.
What this means is both parties provide joint instructions to a valuer who will then go and determine the value of the business. This can be quite an expensive exercise with a significant business. This is because it will be critical to identify what the actual value of the business is for negotiation purposes.
If you or your spouse have an involvement in any business it is critical that you get independent legal advice as to the value of the business and how that business may be treated as part of your family law property settlement. Here at Turnbull Hill Lawyers, we have an experienced family law team that can assist you.