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Valuing a business during divorce is crucial for fair property division under Oregon law. This article explores key considerations and legal precedents.
Use this article as general information to understand the issue, preserve useful records, and identify the next questions to ask an attorney about your own facts.
Published June 12, 2025
In the realm of Oregon family law, the valuation of a business owned by one or both spouses can significantly impact the outcome of divorce proceedings. Properly assessing the value of such an asset is essential to achieving an equitable distribution of property, as mandated by ORS 107. 105.
When a marriage dissolves, all marital assets must be identified and valued to facilitate an equitable division. A business owned by either spouse is often among the most valuable assets in play. The challenge lies in determining its true worth, which may include tangible assets like real estate and inventory, as well as intangible ones such as goodwill.
Consider the hypothetical case based on principles similar to those seen in In re Marriage of Slater. Here, one spouse owned a chiropractic practice acquired before marriage, with part of its purchase price allocated to " goodwill. " Goodwill represents the reputation and customer relationships that contribute to future earnings but lack physical form. In this scenario, accurately valuing goodwill becomes contentious. Courts must distinguish between personal goodwill—tied directly to an individual's skills—and enterprise goodwill—related to the business itself (see Slater and Slater, 236 Or App 256 (2010)). Only enterprise goodwill is typically subject to division.
Oregon courts employ various methodologies for business valuation, including asset-based approaches, income-based approaches (such as discounted cash flow analysis), and market-based approaches comparing sales data from similar businesses. Each method has its merits depending on the nature of the business involved.
Spouses should prepare for potential disputes over valuations by gathering comprehensive financial records and considering hiring forensic accountants or professional appraisers experienced in divorce contexts. Such experts can provide impartial assessments that withstand scrutiny under cross-examination.
For those navigating a divorce involving complex assets like businesses, consulting with experienced divorce attorneys is crucial. An attorney can help ensure that valuations are conducted fairly and reflect true market conditions while safeguarding your interests throughout negotiations or litigation. For more information on how Pacific Family Law Firm can assist you with your specific circumstances regarding high asset divorces or other family law matters, please contact us directly.
Family transitions can bring court deadlines, financial uncertainty, parenting questions, and strong emotions at the same time. The first job is to steady the situation, understand the facts, and identify the legal options that fit your family.
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