Divorce & Business Valuations: Rules Vary By State

Oct 25, 2023

So, you have a client who is going through a divorce, and they need a business valuation to settle the allocation of assets. Or you are filing for a divorce and need to hire a business valuation professional.

Whatever the situation, state-specific knowledge is essential.

When it comes to business valuations for settling divorces, every state has its own rules.

Time and money could be lost by hiring a part-time business appraiser who prepares valuations on the side or a full-time appraisal professional who has limited experience.  

Example: New Hampshire and Massachusetts

People drive over these state lines regularly to go to work, go out to dinner, or run errands. But, when it comes to business valuations for divorces, two bases of valuations exist.

In the Commonwealth of Massachusetts, the standard of value is the Fair Value to the Holder rather than Fair Market Value. The Supreme Judicial Court ruled in Bernier vs. Bernier that business valuations assumed each party had 50% ownership in the business and because of a divorce, one party was giving up the 50% interest and the other was walking away with the whole. Rather than a business valuation determined by mimicking a transaction in the open market, valuation would be determined based on fair value to the holder. The income approach using public stock market data, without reductions for lack of marketability is generally preferred while a market approach using transactions of privately held companies is generally not used.

In New Hampshire, valuation of a business in the case of settling a divorce is based on fair market value, considering the actual prices paid for privately held companies in the market.  

When referred to a business appraiser or evaluating a business appraiser, ask them about their experience in valuations in the state that is the venue for your matter. In business valuations for divorce, the venue is determined by the state of the divorce, not where the business operates. The business may be in Salem, MA while the parties live in Salem, NH. New Hampshire rules may govern the preparation of the opinion of value.

Another Nuance: Dates and Business Valuations

It may seem like a pretty straightforward question – what is the date of the business valuation in the matter of a divorce settlement? Well, it depends.

In some states, by law, the valuation date must be the date when the couple filed for divorce.

In Massachusetts, the date of the business valuation is not specific, but most parties want the valuation not to be ‘stale’, therefore updates are typical as the attorneys inform the business appraisal professional of the divorce proceedings with updated timelines as court dates are determined.

Other states including New Hampshire, operate similarly to Massachusetts as there is not a specified date requirement, but being timelier may be less important.

Based on the state laws, it becomes readily apparent how important timing can be. Getting an experienced, credentialed, business valuation professional secured early in the divorce process in order not to elongate a typically lengthy process is recommended.


If you are seeking to refer a client to a business appraisal professional related to a divorce or need to retain such a professional, make sure to ask about their knowledge of state divorce procedures. Anyone going through a divorce has a lot on their mind and the last thing you need is to learn the detailed business valuation that you have paid thousands of dollars for was not prepared applying the correct standard of value for the applicable venue.

When settling a divorce where a privately held business is involved, secure a knowledgeable and experienced business appraiser.

When Values Matter.

Contact us.