Guide · DivorceBusiness valuation in divorce.
How a business is valued when its owner divorces in Florida: what is marital, which date counts, the three approaches, who does the work, the records you need and where the numbers are usually fought over.
By Geoffrey B. Davis Jr.Updated November 11, 202610 min read
In brief
For many couples the business is the largest asset in the divorce and the hardest to price, because there is no market quote. Florida law sets the standard, fair market value, and leaves the method to experts and the judge. This guide explains, in plain terms, how that works and what each side needs to do so the final number rests on real evidence.
Key points
- 01
Value drives the whole settlement
The owner usually keeps the business, so its value sets what the other spouse receives in exchange.
- 02
Three approaches, one standard
Income, market and asset approaches are all considered; the conclusion must be fair market value with personal goodwill removed.
- 03
Credentials matter
Use an appraiser with an ABV, CVA or ASA credential and divorce testimony experience.
- 04
Test the books first
Underreported revenue or inflated expenses flow straight into every approach. A forensic review protects the valuation.
Why does the business value matter?
Florida courts divide marital property by equitable distribution. The judge starts from the premise that the marital estate should be split equally and departs from that only for reasons in the statute.1 One of those reasons is the desirability of keeping “an interest in a business, corporation, or professional practice, intact and free from any claim or interference by the other party.”1 In practice the spouse who runs the business keeps it, and the other spouse receives other assets or payments to balance the split.
That makes the business value the number every other number depends on. Set it too low and the non-owner spouse leaves with less than half; too high and the owner may have to borrow or sell assets to pay out a value that does not exist. In a contested case the judgment must identify the marital assets and include “the individual valuation of significant assets,” so the judge needs evidence to support a specific figure.1
The value of a business can also overlap with support. The same earnings used to value the business may be used to set alimony and child support, which is why our divorce asset and income analysis work looks at both together.
Is the business marital or nonmarital?
A business started or bought during the marriage is presumptively marital, like any other asset acquired during the marriage.1 A business owned before the marriage, or inherited or received as a gift, starts out as nonmarital. But Florida treats as marital “the enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.”1
So if one spouse owned a small company at the wedding, ran it full time for fifteen years and reinvested marital earnings into it, the growth over those years may be marital even though the original company is not. That requires two values, at the start and at the valuation date, and evidence of what drove the change.
Since July 1, 2024, the statute also lists “the marital interests in a closely held business” among marital assets and sets the rules for valuing them.2
How is a business valued in a divorce?
Florida law fixes the standard of value. For a closely held business it is fair market value: “the price at which property would change hands between a willing and able buyer and a willing and able seller, with neither party under compulsion to buy or sell, and when both parties have reasonable knowledge of the relevant facts.”1 The same idea runs through Revenue Ruling 59-60, the long-standing IRS guidance appraisers still use, which lists factors such as the history of the business, its financial condition, its earning capacity and whether it has goodwill.3
To estimate fair market value, appraisers use three generally accepted approaches, and the IRS’s own guidelines say all three should be considered.4
| Approach | What it asks | Often used for | Strengths | Weaknesses |
|---|---|---|---|---|
| Income | What are the business’s future earnings worth today? | Profitable operating businesses and professional practices | Reflects the business’s actual earning power | Depends heavily on the earnings figure and the rate chosen; small changes move the value a lot |
| Market | What have buyers paid for similar businesses? | Industries with good sale data, such as many service and retail businesses | Grounded in real transactions | True comparables are scarce; sale prices may include the seller’s personal goodwill or a non-compete |
| Asset | What are the assets worth, minus the debts? | Holding companies, real estate or equipment-heavy businesses, and businesses losing money | Easier to verify item by item | Usually misses goodwill and other intangible value in a profitable business |
The appraiser explains why each approach was used or rejected and reconciles them into one conclusion.
Source: IRM 4.48.4; AICPA VS Section 100, paras. .31–.33; Held.456
Goodwill, briefly
Goodwill is the value of a business beyond its tangible assets: the expectation that customers will keep coming back. Florida splits it in two. Goodwill that exists “separate and distinct from the continued presence and reputation of the owner spouse” is enterprise goodwill, a marital asset the court must value.1 Goodwill that depends on the owner personally is not divided, though the Florida Supreme Court has said it can be relevant to alimony.7 Courts must consider evidence that a buyer would require a non-compete agreement, but that evidence alone does not rule out enterprise goodwill.1 Our whitepaper on business goodwill in a Florida divorce covers the cases and the evidence in detail.
Who values the business, and how many experts?
Business valuation is specialist work. Three credentials are common:
- ABV (Accredited in Business Valuation), granted by the AICPA. CPAs need 1,500 hours of valuation experience in the prior five years, other finance professionals 4,500, plus an exam and continuing education.8
- CVA (Certified Valuation Analyst), issued by the National Association of Certified Valuators and Analysts (NACVA).9
- ASA (Accredited Senior Appraiser) in business valuation, awarded by the American Society of Appraisers after five years of full-time appraisal experience, coursework or a challenge exam and a review of a written report.10
AICPA members who value a business must follow the AICPA’s valuation standard, VS Section 100, including in litigation.11 That standard distinguishes a full valuation engagement, which ends in a conclusion of value, from a more limited calculation engagement, which ends in a calculated value based on procedures agreed with the client.5 If you receive a report, check which kind it is.
One neutral expert or two?
Spouses can agree on one neutral appraiser, a judge can appoint one, or each side can hire its own. Florida’s family law rules apply the same procedures to court-appointed and party-retained experts, give no presumption of correctness to a court-appointed expert’s opinion and allow cross-examination of every expert. The rule’s committee note records that a Florida appellate court has encouraged court-appointed experts to review financial information and reduce the cost of divorce litigation.12
A single expert is usually cheaper and quicker. Dueling experts are more common when one spouse controls the records and the other distrusts them. For what experts typically charge and what drives the cost, see our guide to how much a forensic accountant costs.
What records are needed, and how long does it take?
Florida’s mandatory disclosure rule gives the starting point. Within 45 days of service of the initial pleading, each spouse must serve a sworn financial affidavit, three years of personal tax returns, financial statements and loan applications from the prior 24 months, and “corporate, partnership, and trust tax returns for the last 3 tax years” for any entity in which the spouse has an interest. A spouse claiming a nonmarital asset or its enhancement must produce supporting documents.12 Our guide to the Florida financial affidavit explains what the affidavit must show.
- Business tax returns (Forms 1120, 1120-S or 1065) with all schedules, at least three years and ideally five
- Annual and monthly financial statements, and the general ledger in its native accounting file
- Bank, credit card and merchant processor statements for every business account
- Payroll registers, W-2s, 1099s and the owner’s K-1s and compensation records
- Accounts receivable and payable agings, billing records and work in progress at the valuation date
- Leases, especially any lease with the owner or a relative, and loan agreements
- Shareholder, operating or partnership agreements and any buy-sell agreement
- Customer and vendor lists, major contracts and any recent offers or appraisals
- Documents showing the value at marriage or acquisition, if a nonmarital claim is made
Mandatory disclosure is a floor. Ledgers, bank records and customer data usually come through formal discovery requests.
How long a valuation takes depends on the size of the business, the state of the records and how cooperative the owner is. The stages are predictable even when the calendar is not:
- 01
Disclosure and discovery
Mandatory disclosure within 45 days of service, followed by requests for ledgers, bank records and business documents.
- 02
Retain the expert
Choose a neutral or party appraiser, and a forensic examiner if the records are doubtful. Agree the valuation date question early.
- 03
Test the records
Reconcile returns, ledgers and bank deposits; investigate gaps, cash and related-party dealings.
- 04
Value and report
The appraiser normalizes earnings, applies the approaches, separates personal goodwill and issues a report.
- 05
Mediation or trial
Reports are exchanged and tested in deposition, mediation or at trial, where every expert can be cross-examined.
Source: Fla. Fam. L. R. P. 12.285 and 12.365.12
Where do the valuations usually disagree?
When two appraisers reach very different numbers, the gap usually traces to a handful of decisions:
- Owner compensation. Replacing the owner’s actual pay with a market wage changes earnings, and Revenue Ruling 59-60 warns that a controlling owner “can substitute salaries and bonuses for dividends, thus reducing net income.”3
- Personal and one-time items. Personal expenses run through the business, and nonrecurring income or costs, should be adjusted out. The ruling tells appraisers to “separate recurrent from nonrecurring items of income and expense.”3
- Goodwill. How much of the value would survive without the owner.1
- Comparables. Whether the sales used in a market approach depended on the sellers staying on or signing restrictive covenants, a gap a Florida appeals court found significant in reversing a valuation.6
- Valuation date. Which date the judge should use, and whether results changed around the separation.1
How fraud examination complements valuation
In a divorce the owner benefits from a lower value, so the risk is understatement. The ACFE’s fraud classification lists net income understatements through timing differences, understated revenues and overstated liabilities and expenses, and defines skimming as taking a payment “before it is recorded on the organization’s books and records.”13 Delayed billing, unrecorded cash and new payables to insiders all lower the figures an appraiser starts from.
A fraud examiner tests the records before they are valued: reconciling returns to ledgers and deposits, rebuilding revenue, checking cut-off around the valuation date and tracing money that left the business. Fraud Examination Service is not a business appraiser and does not issue valuations; it gives the appraiser and counsel tested facts. Our whitepaper on finding hidden assets in a Florida divorce describes the tracing methods, and the Pitt v. Jolie and Château Miraval case study shows how a business interest’s value can stay in dispute long after a divorce is settled. To discuss a specific business, see our divorce financial investigation services.
Common questions.
Short answers. The numbered notes link to the sources.
In Florida a closely held business is valued at fair market value: the price a willing and able buyer and seller, both informed and neither under pressure, would agree on. A credentialed appraiser considers the income, market and asset approaches, adjusts the financial statements for items such as owner pay and one-time events, and separates personal goodwill, which is not divided, from enterprise goodwill, which is.
The business itself can remain nonmarital, but in Florida any increase in its value caused by either spouse’s work during the marriage, or by marital money put into it, is a marital asset. The spouse claiming the business or its growth is nonmarital must produce documents supporting that claim, covering the period from acquisition or marriage to the date of production.
The judge chooses the valuation date or dates that are just and equitable in the circumstances, and different assets can be valued as of different dates. That is separate from the cut-off date for deciding which assets are marital, which is the earliest of a valid separation agreement, a date that agreement sets, or the filing of the divorce petition.
A credentialed business appraiser, typically holding the ABV from the AICPA, the CVA from the National Association of Certified Valuators and Analysts, or the ASA in business valuation from the American Society of Appraisers. Each credential requires valuation experience and examination. Ask about divorce and testimony experience as well as the credential itself.
Either can work. A single neutral expert, by agreement or court appointment, usually costs less and narrows the dispute. Separate experts give each side its own analysis and are common when the numbers are contested. Florida’s rules give a court-appointed expert no presumption of correctness, and every expert can be cross-examined.
Ask for a forensic review of the records before the valuation is finalized. A fraud examiner reconciles tax returns, ledgers and bank deposits, tests billing and payables around the valuation date and traces diverted revenue. The appraiser can then value the business on corrected numbers, and counsel has evidence to challenge a value built on manipulated books.
Sources
Sources and method.
Facts were checked on November 11, 2026 against the 2025 Florida Statutes and the 2024 session law that amended them, the October 1, 2026 Family Law Rules, Florida appellate opinions, IRS guidance and the credentialing bodies’ own pages.
- 1The Florida Senate · 2025Florida Statutes §61.075, equitable distribution of marital assets and liabilities
- 2Laws of Florida · Approved June 13, 2024Chapter 2024-237 (House Bill 521), equitable distribution of marital assets and liabilities
- 3Internal Revenue Service · October 29, 2014Valuation of non-controlling interests in S corporations: a job aid for IRS valuation analysts (Appendix A reprints Rev. Rul. 59-60, 1959-1 C.B. 237)
- 4Internal Revenue Service · September 22, 2020Internal Revenue Manual 4.48.4, Business Valuation Guidelines
- 5AICPA (reproduced copy) · As printed April 13, 2015VS Section 100, Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset
- 6Florida Fourth District Court of Appeal (FindLaw copy) · September 7, 2005Held v. Held, 912 So. 2d 637 (Fla. 4th DCA 2005)
- 7Florida Supreme Court (Justia copy) · January 10, 1991Thompson v. Thompson, 576 So. 2d 267 (Fla. 1991)
- 8AICPA and CIMA · Current textAccredited in Business Valuation (ABV) credential
- 9National Association of Certified Valuators and Analysts · Current textCertified Valuation Analyst (CVA)
- 10American Society of Appraisers · Current textBusiness Valuation: AM and ASA designations
- 11AICPA and CIMA · Current textStatement on Standards for Valuation Services (VS Section 100)
- 12The Florida Bar · October 1, 2026Florida Family Law Rules of Procedure (rules 12.285 and 12.365)
- 13Association of Certified Fraud Examiners · 2026The Fraud Tree: occupational fraud and abuse classification system
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This guide is general information, not legal or tax advice. Talk to your attorney about your own matter.