Quick answer: Before any business gets valued in a Florida divorce, two threshold choices already shape the result: when the business is valued, and what “value” means. On the date, Florida law (§61.075(7)) gives the judge discretion to use whatever date is “just and equitable,” and different assets may be valued as of different dates — separate from the fixed classification cut-off (the date that decides what is marital). On the standard, the analysis usually applies fair market value — what a hypothetical willing buyer would pay — though the “value to the owner” view is sometimes argued, and the choice drives how goodwill and discounts come out. The court decides the date and the legal standard; my job is to state the standard I am applying and calculate accurately under it.
This is a spoke of the hub on business valuation in a Florida divorce.
Two different dates — don’t confuse them
Florida’s §61.075(7) actually sets up two dates that do different jobs:
- The classification cut-off date decides what is marital. The statute fixes it as the earliest of the date the parties sign a valid separation agreement, a date their agreement sets, or the date the dissolution petition is filed. Assets acquired after that cut-off are generally not marital.
- The valuation date decides how much the marital asset is worth. Here the statute gives the judge discretion: the date is “the date or dates as the judge determines is just and equitable under the circumstances,” and “different assets may be valued as of different dates.”
That split matters enormously for a business, because a company’s value can move a great deal between the filing date and the trial date. The classification question may be settled, while the valuation date is still very much in play.
Why the date is fought over for a business
A bank balance on a given day is what it is. A business is different: its value can swing materially over the months — often years — between separation, filing, and trial. Two questions drive the fight:
- How much did the value change, and when? A business worth one number at filing can be worth a very different number at trial.
- Why did it change? If the post-separation change came from the owner-spouse’s continued effort, that points one way on what date is “just and equitable”; if it came from passive market movement, it points another. This is the same active-versus-passive question I analyze for investment accounts (see the active-vs-passive appreciation hub) — here it informs which valuation date the court should find equitable.
Illustrative example (hypothetical, no client data): A business is worth about $1,500,000 at the date of separation and about $2,100,000 eighteen months later at trial. The date choice alone is a $600,000 swing. Whether that growth reflects the owner-spouse’s post-separation labor or a passive market lift is exactly the kind of fact that bears on which date is just and equitable — so I quantify the value at more than one date and identify what drove the change, rather than asserting a single number.
The standard of value — and why it changes the answer
“Value” is not one thing. The two that come up:
- Fair market value — the price a hypothetical willing buyer would pay a willing seller, neither compelled. This is the common default in divorce valuation. Under it, value that depends on the specific owner (personal goodwill) tends to drop out, and discounts for a non-controlling or hard-to-sell interest may come into play.
- Value to the holder (investment value) — what the business is worth to this owner who will keep operating it, which can be higher because it captures benefits a hypothetical buyer would not pay for.
The standard is sometimes contested, and it is a legal determination — but it changes the math: it affects whether personal goodwill is excluded and whether marketability and control discounts apply. So I state the standard I am applying, apply it consistently across goodwill and discounts, and — where the standard is genuinely open — calculate under more than one so the court can choose on a clear record. (For more on the distinction, see fair market value vs. fair value.)
A distinction worth flagging: the divorce “fair market value” standard is not the statutory “fair value” used in a Florida shareholder buyout or oppression case under the business-corporations statute, where discounts are often not applied. Those are different standards in different contexts; conflating them is a common and costly error. (For that separate corporate context, see the shareholder fair-value framework.)
How I handle the date and standard in practice
The date and the standard are legal calls that belong to counsel and the court; I do not pick them. What I do is: confirm counsel’s instruction on each, document the assumption in the report, and — when the date or standard is contested — present the value under each defensible alternative so the result is transparent. A valuation that silently buries a date or standard choice invites attack; one that states the assumption and shows the sensitivity holds up.
If you are an attorney handling a Florida divorce with a closely-held business, Joey Friedman, CPA, P.A. prepares valuations that state the standard, address the valuation date, and quantify the sensitivity, statewide.
Related resources
- Hub: How a Forensic CPA Values a Business in a Florida Divorce
- Fair Market Value vs. Fair Value in Business Valuation
- Equitable Distribution Analysis in a Florida Divorce
Frequently asked questions
What date is a business valued on in a Florida divorce?
Under §61.075(7), the judge selects a valuation date that is “just and equitable,” and different assets may be valued on different dates. That is separate from the classification cut-off — the earliest of a separation agreement, an agreed date, or the petition filing — which decides what is marital in the first place.
Can a business be valued on a different date than other assets?
Yes. Florida’s statute expressly allows different assets to be valued as of different dates in the judge’s discretion, which matters when a business’s value moves significantly between separation and trial.
What standard of value is used to value a business in divorce?
Most often fair market value — what a hypothetical willing buyer would pay. A “value to the owner” standard is sometimes argued. The choice affects whether personal goodwill is excluded and whether discounts apply, so the expert should state and consistently apply the standard.
Is divorce “fair market value” the same as “fair value” in a shareholder dispute?
No. The statutory “fair value” used in a Florida shareholder buyout or oppression case is a different standard in a different context — discounts are often not applied there — and should not be confused with the fair market value typically used in divorce.
By Joey N. Friedman, CPA, ABV, M.Acc, MIB — President, Joey Friedman, CPA, P.A.