KW Economics prepares business valuation for divorce and marital dissolution matters venued in Illinois: the income, valuation, and tracing questions the matter raises, the records that answer them, and a presentation built to the way Illinois courts decide them. Either party.
In a divorce the business valuation is usually the largest and most contested figure in the marital estate, and the valuation date, the treatment of personal goodwill, and the normalization of owner compensation move it materially. The economist normalizes the financial statements for owner compensation, personal expenses, and non-recurring items, values the business under the standard the domestic relations framework applies, and addresses personal and enterprise goodwill where the framework requires the distinction. The same normalized statements support the income determination for support, so the two analyses reconcile.
Valuation of closely held businesses and ownership interests for shareholder and partnership disputes, divorce, estate and gift matters, and buy-sell disagreements. The work applies the income, market, and asset approaches under the standard of value that governs the matter, addresses discounts for lack of control and marketability where they apply, and documents every input so the conclusion can be tested on cross-examination.
The business valuation is usually the largest and most contested figure in the marital estate, and the valuation date, the standard of value, the treatment of personal and enterprise goodwill, and the normalization of owner compensation each move it materially. Income available for support for a self-employed spouse can differ substantially from the reported figure once personal expenses paid by the business and cash flow retained in it are considered, and the owner compensation adjustment has to be carried consistently into the valuation and the income determination, because the same stream of earnings appears in both. Tracing outcomes depend on the completeness of the account records and on how the governing framework, whether equitable distribution or community property, treats commingled funds and the appreciation of separate assets during the marriage.
Illinois courts ask whether the methodology behind an expert opinion is generally accepted in the relevant professional community, and separately whether the economist is qualified by training and experience and applied the method to the facts of the case. Forensic economic methods for lost earnings, worklife, and present value are published and long used, so the examination usually turns on the inputs and their support in the record.
Highest court: Illinois Supreme Court. Court system: illinoiscourts.gov.
Federal venues: Northern District of Illinois, Central District of Illinois, Southern District of Illinois.
Whether Illinois divides marital property equitably or as community property, which valuation date applies, how income available for support is defined, and how the goodwill of a professional practice is treated are questions of law that counsel confirms; the report presents each finding so it can be applied under either party's position.
We issue the final report and provide deposition and trial testimony and critique of opposing valuation reports.
The same four steps apply to a divorce and marital dissolution matter venued in Illinois; the governing framework in Illinois decides how each finding is applied. Normalize the business's cash flow for owner compensation, personal expenses paid through the business, related-party dealings, and non-recurring items, listing each adjustment with its source. Value the business or practice as of the date the governing framework requires, under the income, market, and asset approaches as the facts support, and address personal and enterprise goodwill where the framework distinguishes them. Determine each spouse's income available for support from the same normalized statements, including distributions, perquisites, and cash flow retained in the business beyond reported salary. Trace separate property through the account statements step by step, classify commingled funds under the framework counsel identifies, and reduce pensions and deferred compensation to present value with the assumptions stated.
Illinois courts ask whether the methodology behind an expert opinion is generally accepted in the relevant professional community, and separately whether the economist is qualified by training and experience and applied the method to the facts of the case. Forensic economic methods for lost earnings, worklife, and present value are published and long used, so the examination usually turns on the inputs and their support in the record. Divorce and Marital Dissolution cases venued in Illinois are heard in the Circuit Court (General jurisdiction; 25 judicial circuits across the state, including the Circuit Court of Cook County), with final appeals to the Illinois Supreme Court. Matters within federal jurisdiction proceed in the Northern District of Illinois, Central District of Illinois, and Southern District of Illinois.
Whether Illinois divides marital property equitably or as community property, which valuation date applies, how income available for support is defined, and how the goodwill of a professional practice is treated are questions of law that counsel confirms; the report presents each finding so it can be applied under either party's position. The report presents past and future amounts separately, states every rate and table with its source, and shows the result under the alternatives the other side is likely to argue, so counsel can apply the Illinois rules to a documented figure.
Request a consultation on Business Valuation or call (201) 343-0700. Plaintiff and defense counsel.