No Ticker Symbol, No Easy Answer: How Florida Courts Put a Price on a Closely Held Business in Divorce
For many Florida couples, the most valuable marital asset is not the home or a retirement account but a business, such as a medical practice, a landscaping company, or a family restaurant. Unlike a brokerage account, a closely held business has no daily market price. Its value must be built from financial records, industry data, and expert judgment, which makes it one of the more analytically demanding issues in a Florida divorce.
A Statutory Framework Arrives in 2024
For years, the rules for valuing a business in a Florida divorce developed largely through appellate decisions. In 2024, the Legislature amended Section 61.075, Florida Statutes, and subsection (6)(a)1.f. now addresses closely held businesses directly. It adopts fair market value as the standard: the price at which the business would change hands between a willing and able buyer and seller, neither under compulsion and both reasonably informed.
That definition describes a hypothetical sale. The question is not what the owner spouse believes the company is worth, but what an informed buyer would reasonably pay.
How Valuation Professionals Approach the Question
Business valuation experts generally draw on three broad approaches:
- Income approach: estimates future earnings or cash flow and converts them to a present value
- Market approach: compares the business with sales of similar companies
- Asset approach: measures the value of tangible and intangible assets, less liabilities
Opposing experts may select different methods or inputs, and small shifts in assumptions, such as the rate used to discount future income, can produce figures that are far apart.
Enterprise Goodwill Versus Personal Goodwill
Goodwill is frequently the most contested component. Under Section 61.075(6)(a)1.f.(II), 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. Goodwill rooted in an owner’s individual skill and relationships, often called personal goodwill, has historically been treated differently by Florida courts.
The practical test is revealing: would the business keep its customers and revenue if the owner stepped away? A practice with an established client base, trained staff, and a recognized brand may carry substantial enterprise goodwill, while a solo operation built on one person’s reputation may carry little. The statute also provides that evidence a buyer would require a covenant not to compete must be considered but does not, by itself, rule out a finding of enterprise goodwill.
Timing, Classification, and Division
Several other provisions shape the outcome. Under Section 61.075(7), the judge selects a just and equitable valuation date, and different assets may be valued as of different dates. A business formed before the marriage may be nonmarital, yet enhancement in its value from marital efforts or funds can be marital under subsection (6)(a)1.b. Because subsection (1)(f) recognizes the desirability of keeping a business intact, the company often remains with the operating spouse, with the distribution balanced through other assets or payments.
Understanding the Numbers Behind Your Family Business
A business valuation dispute is, at its core, a dispute about evidence and assumptions. At Baginski Brandt & Brandt, we recognize how much a family enterprise can represent, both financially and personally. Our Port St. Lucie property division attorneys welcome the opportunity to explain how Florida’s valuation framework operates. We invite you to contact our Port St. Lucie office, or to arrange a meeting in Stuart or Fort Pierce, to learn more.
