In a property division case, the value of a privately-held business is often a central issue. Virginia uses the “Intrinsic Value” standard in valuing your business in the property division portion of your divorce case. Attorney Van Smith and his colleagues at Smith Strong, PLC have experience in guiding clients through the property division portion of their divorce and understands the procedures followed in calculating the “Intrinsic Value” standard of your business.
Intrinsic Value Standard: Defined
Intrinsic value is defined as the intrinsic worth to the parties of the business. The Virginia Court of Appeals stated in Howell v. Howell that:
Code § 20-107.3(A) directs that the trial court value all property of the parties, but it does not define the term, “value” for equitable distribution purposes. The statute does not set the standard of value, that is, the measure of the property’s worth for equitable distribution. “Value” is a mercurial term; the term has numerous, distinct meanings. The various meanings are not interchangeable. The meaning of the term, “value,” depends on what is being valued, who is interested, and why it is being valued. A piece of property may have different values for different purposes. The purpose for which it is being valued determines which definition or standard of value is proper. Purpose determines the standard of value; that, in turn, determines the appropriate methods of valuation.
This means that there exists no clear definition of what “value” is in determining the intrinsic value of a business. Instead, the court looks to a variety of factors to determine what the intrinsic value of the business is to both parties and the marriage.
The attorneys at Smith Strong, PLC can help you in obtaining a proper valuation for the division of your business. Call today to schedule a consultation for developing a comprehensive case plan.