Divorce – State by State Standards of Value and Treatment of Personal Goodwill

Divorce proceedings trigger the need for a business valuation when a business is involved. It is very important to define the standard of value and to separate personal goodwill from enterprise goodwill as part of the valuation process.

Standard of Value

The standard of value defines the value to whom and under what assumptions.  This includes both real and hypothetical circumstances.  All value is a function of the present worth of the future benefits the ownership interest is expected to generate for the holder of that interest.

In divorce cases, the standard of value determines whether the business interest is valued as if it is to be sold (Fair Market Value) or valued as if it is held by a specific individual (Fair Value to the Holder or Investment Value).


In many states, personal goodwill is not considered a marital asset. In some states, no goodwill, including enterprise and personal goodwill are considered marital assets.

The following table shows generally where each state stands regarding a standard of value and whether personal goodwill is considered a marital asset. However, these are generalizations, and each state has its own particular nuances. 

Table of Standard of Value and Personal Goodwill in Divorce by State

Note the below are subject to change and as noted, there are nuances to discuss based on the state and the situation. Please contact us to discuss.

StateStandard of Value in DivorceIs Personal Goodwill a Marital Asset?*
AlabamaFair ValueUndecided
AlaskaFair Market ValueNo
ArizonaInvestment ValueYes
ArkansasFair Market ValueNo
CaliforniaInvestment ValueIt’s complicated.
ColoradoInvestment ValueYes
ConnecticutFair Market ValueNo
DelawareFair Market ValueNo
District of ColumbiaFair Market ValueNo
FloridaFair Market ValueNo
GeorgiaFair Market ValueNo
HawaiiFair Market ValueNo
IdahoFair Market ValueIt’s complicated.
IllinoisFair Market ValueNo
IndianaFair Market ValueIt’s complicated.
IowaFair Market ValueIt’s complicated.
KansasFair Market ValueFocus on ‘marketability’ or ‘salability’
KentuckyFair Market ValueNo
LouisianaFair Market ValueNo
MaineFair Market ValueNo
MarylandFair Market ValueNo
MassachusettsFair ValueNo
MichiganInvestment/Fair Market ValueYes
MinnesotaFair Market ValueNo
MississippiFair Market ValueNo (includes all goodwill)
MissouriFair Market ValueNo
MontanaInvestment/Fair Market ValueYes
NebraskaFair Market ValueYes
NevadaInvestment ValueYes
New HampshireFair Market ValueNo
New JerseyFair/Investment ValueYes
New MexicoInvestment ValueYes
New YorkInvestment/Fair Market ValueYes
North CarolinaFair Market ValueYes
North DakotaFair Market ValueYes
OhioFair Market ValueYes
OklahomaFair Market ValueNo
OregonFair Market ValueNo
PennsylvaniaFair Market ValueNo
Rhode IslandFair Market ValueNo
South CarolinaFair Market ValueNo
South DakotaFair Market ValueIt’s complicated.
TennesseeFair Market ValueIt’s complicated.
TexasFair Market ValueNo
UtahFair Market ValueNo
VermontFair Market ValueNo
VirginiaFair ValueNo
WashingtonInvestment ValueYes
West VirginiaFair Market ValueNo
WisconsinFair Market ValueFocus on ‘marketability’ or ‘salability’
WyomingFair Market ValueNo
*Source: as of April 2019.
get started

Why Merrimack Business Appraisers?