Family Law and Divorce
Attorney at Law, Bellevue, WA
When Experience Counts
Hansen Law Group is a full service divorce and family law-oriented law firm in Bellevue, Washington. I focus on divorce and family law, in Washington State, including: division of assets, including valuing and dividing small and large businesses; development of parenting plans; child and spousal support; maintenance; child support modifications; interstate and international relocation cases.
I handle between forty and fifty family law cases a year. Over the last fifteen years, since 1995, I have handled both complex and simple cases. I have handled high net worth divorce trials involving businesses worth millions of dollars. I have both a law degree and an MBA, and have extensive experience in business.
Many times there will be a small or medium sized business involved in the divorce. It may be a daycare; it may be a real estate investment company; it may be a software development corporation. It may be a manufacturing company with 40 or 50 employees. It may be set up as an LLC, or as a Subchapter S Corporation. Both spouses may own stock in the company; or only one spouse may own shares.
Deciding what to do with a company is a complicated analysis. There are some fundamentals:
- Are there Buy and Sell Agreements? Questions as to whether there are Buy and Sell Agreements might complicate the ability to value and divide the business.
- What Is The Value? For business owners, the value of the business is undoubtedly the largest issue in the case. In the case of Marriage of Hall, 103 Wn.2d 236, 692 P.2d 175 the court delineated five methods of determining the value of a business: 1) The straight capitalization accounting; 2) The capitalization of excess earnings method; 3) The I.R.S. variation of capitalized excess earnings method; 4) The market value approach; and 5) The buy/sell agreement method. Which method is best for the business in question is often in dispute. Experts are usually retained to provide an opinion as to which method is appropriate and what the value will be. There are some less expensive ways to do this; but whether they work depends on the facts in the case. Call me.
- Is There Any Goodwill? In small professional companies (such as law firms, dental practices, chiropractic clinics, accountants, and medical practices), there may be only one or two professionals, and a few assistants. It can be an unpleasant surprise to find out the business may be worth money, even if it is really only the professional billing her time. “Goodwill” is defined, generally, as a multiple of the excess earnings, over what the professional could earn as an employee. It may be worth a lot; it may be worth nothing. But it is frequently a critical element of the case.
- Who Runs The Company? Many times both spouses have helped to run the company. In a divorce, it is very hard to make that happen. In these cases, the court will frequently make one person run the company – but pay spousal support, or child support, to the other party.
Dividing a small business can be just as painful as the overall divorce. Managing that process takes a skilled and experienced attorney. Consult with one that has dealt with the problem and who understands business. Call me.