If you are a business owner preparing to go through a divorce, one of your biggest concerns will be what happens to your business after a Florida divorce. One of the first things a Florida divorce court will do is work to place a value on your business. Many different factors go into a business valuation, and the tests are constantly evolving. Valuing a business is a difficult task, especially for a judge (who likely has never worked in a business). There are many reasons for a business’s success, so it’s hard to separate what specific value in the business can be divisible in a divorce.
Florida Statute 61.075 gives the court a framework to value a closely held business:
“The court shall determine the value of the marital interests in a closely held business as follows:
- The standard of value of a closely held business is fair market value…the term “fair market value” means the price at which property would change hands between a willing and able buyer and a willing and able seller, with neither party under compulsion to buy or sell, and when both parties have reasonable knowledge of the relevant facts.
- If there is goodwill separate and distinct from the continued presence and reputation of the owner spouse, it is considered enterprise goodwill, which is a marital asset that must be valued by the court.
- The court must consider evidence that a covenant not to compete or a similar restrictive covenant may be required upon the sale of a closely held business, but such evidence alone does not preclude the court from finding enterprise goodwill.
This statute directs the court to consider the business’s fair market value, any enterprise goodwill, and evidence of noncompete agreements. The court then weighs these factors with all the other evidence and expert opinion to arrive at a final value for your business.
This article tracks the Florida courts’ opinions on how to strike that balance. It includes how the court considers each factor, methods experts can use, and how a Florida divorce court reaches a final valuation.
Novak v. Novak, 429 So. 2d 414 (Fla. Dist. Ct. App. 1983)
When a spouse holds a controlling interest in a closely held corporation, that can be considered marital property. When dividing this interest, the court does not divide the interest itself but instead grants the interest to one spouse and offers a cash buyout to the other. This solution avoids forcing the spouses to continue to work together as business partners.
“It [would] create the intolerable situation of these erstwhile mates being required to operate a business together. This court has discouraged that financial arrangement.”
“[T]he value of the stock should be determined and the wife should be awarded that value to be paid by the husband…”
Turner v. Turner, 529 So. 2d 1138 (Fla. Dist. Ct. App. 1988)
Businesses, much like property, can fluctuate in value. If your business has increased in value due to marital funds or marital efforts, that increase is marital property and can be divided by a court.
This is true even if you bought or started your business before the marriage. If marital funds or effort touched it, part of that business is divisible.
“[T]he evidence established unequivocally that the increased value of the husband’s separate assets during the marriage was attributable in part to the husband’s marital labor and earnings.”
Robbins v. Robbins, 549 So. 2d 1033 (Fla. Dist. Ct. App. 1989)
This case offers positive subsequent treatment of Novak. A court does not split a business interest, but rather gives the interest to one spouse and an alternative distribution to the other.
This alternative is usually a cash buyout, but courts have offered different options if the controlling spouse cannot buyout. The controlling spouse could purchase the interest within a reasonable time, make periodic installment payments, or the court could require a sale of the stock and distribute those profits evenly.
“Granting the wife a one-half interest in the stock of a closely held corporation has the effect of requiring the former spouses to operate as business partners. Such a financial arrangement is intolerable, and places the spouse without any real control over the closely held corporation at a distinct disadvantage to the spouse who runs the business.”
“[T]here are various alternatives which the trial court may consider in order to provide the wife with the cash value of her stock. Alternatives include: requiring the husband to purchase the wife’s interest within a reasonable time; directing the husband to make periodic installment payments on a lump sum obligation or principal repayment or both; or requiring a sale of the corporate stock at issue and distributing the profits equally.”
Spillert v. Spillert, 564 So. 2d 1146 (Fla. Dist. Ct. App. 1990)
Goodwill is the intangible part of your business that keeps people coming back. There are two types of goodwill: personal and enterprise. Personal goodwill is the tendency of people to return due to the expertise or appeal of the individual; this type of goodwill is tied to the individual and the business would suffer if he left. Enterprise goodwill is the business’s good reputation and client base; it tied to the business itself. If a business has enterprise goodwill, the business will continue to profit and run normally if an individual left.
A court must consider a business’s enterprise goodwill in its valuation. Personal goodwill is not divisible as a marital asset and is not considered in a business’s value.
A business’s value must be based on sufficient evidence. This includes its fair market value, enterprise goodwill, evidence of noncompete agreements, expert testimony, and any other circumstances.
If two experts say different things about a business’s value, a court may choose the extent to which testimony is reasonable. The court cannot “split the difference” between the two experts’ testimony without explaining how they got there.
The expert in this case, who was valuing a plastic surgery practice, found that “over 50% of Dr. Spillert’s referrals were from the emergency room referral lists, and that ‘his value is in his head and hands, and you can’t transfer that.’… all of the goodwill is Dr. Spillert’s.”
“When provable by appropriate evidence, enterprise goodwill may be considered in valuing a spouse’s professional association.”
“The trial judge found the husband’s practice worth $350,675, which represents averaging of the differences of the two expert opinions, a figure not based on any evidence in the record.”
Thompson v. Thompson, 576 So. 2d 267 (Fla. 1991)
When a court values a business, they start with the business’s fair market value. Fair market value is what a willing buyer would pay who is not under duress. Anything that brings value to the business that is not part of its assets or liabilities is considered goodwill, either personal or enterprise.
Enterprise goodwill may be used to value a business, but personal goodwill may not. If the goodwill in question depends on someone’s continued presence at the company, that is personal goodwill and may not be used in valuation. Enterprise goodwill must exist separately from the individual.
“The clearest method would be the fair market value approach, which is best described as what a willing buyer would pay, and what a willing seller accept, neither acting under duress for a sale of the business. The excess over assets would represent goodwill.”
“If goodwill depends on the continued presence of a particular individual, such goodwill, by definition, is not a marketable asset distinct from the individual. Any value which attaches to the entity solely as a result of personal goodwill represents nothing more than probable future earning capacity, which, although relevant in determining alimony, is not a proper consideration in dividing marital property in a dissolution proceeding.”
“[F]or [enterprise] goodwill to be marital property, it must be a business asset having a value independent of the continued presence or reputation of any particular individual.”
“[Enterprise goodwill] is the value of the practice which exceeds its tangible assets and which is the tendency of clients/patients to return to and recommend the practice irrespective of the reputation of the individual practitioner.”
Young v. Young, 600 So. 2d 1140 (Fla. Dist. Ct. App. 1992)
For the court to consider a business’s enterprise goodwill, there must first be proof of the existence of that goodwill. Second, there must be proof of the goodwill’s value, usually from expert testimony. In this case, neither expert gave credible testimony about the goodwill’s value, so the court did not consider goodwill in its valuation.
When you have a professional business, like a law office or dentistry practice, the best way to show that goodwill exists is either through expert testimony or to provide comparable sales or offers. These comparable sales should be as close to your facts as possible: similar businesses, with similar markets and similar circumstances.
“Proof of the existence of goodwill is the first step.”
“The existence of goodwill is shown only when there is evidence of a recent actual sale of a similarly situated professional practice, an offer to purchase such a practice, or expert testimony and testimony of members of the subject profession as to the existence of goodwill in a similar practice in the relevant geographic and professional market.”
“Absent such evidence, one can only speculate as to the existence of goodwill.”
“[T]here was a complete absence of evidence of the existence of goodwill separate from reputation and tangible assets.”
Dyson v. Dyson, 597 So. 2d 320 (Fla. Dist. Ct. App. 1992)
A business valuation by the court must be based on substantial evidence. This includes valuing both its assets and liabilities, like loans or outstanding taxes. If those liabilities aren’t taken into account, the value might be overturned.
“[A]ll of which must be treated as business liabilities to be taken into consideration in valuing each party’s interest in the jointly-owned business.”
“[T]his record does not contain evidentiary support for [the valuation].”
Weinstock v. Weinstock, 634 So. 2d 775 (Fla. Dist. Ct. App. 1994)
This case offers positive subsequent treatment for Thompson. Personal goodwill may not be used in a business valuation because it is tied to the individual, not the business itself.
This case also applies Young’s reasoning about comparable sales. Comparable sales must be as similar to the present business’s situation as possible, and there should be no room for a seller’s continued influence after closing. In this case, none of the comparable sales included a situation where the selling professional left the business immediately after closing. The court said that a sale must remove the seller’s personal goodwill entirely to be comparable for a valuation.
“The inclusion of the goodwill as a marital asset was improper because the evidence failed to establish a value for this goodwill apart from the husband’s continued presence.”
“The purest form of comparable in the sale of any business would be a sale in which, on the day of closing, the seller simply picks up the sales proceeds and retires or moves out of the area, thus eliminating any further personal influence the seller could have on the business.”
Walton v. Walton, 657 So. 2d 1214 (Fla. Dist. Ct. App. 1995)
If your business has a noncompete agreement, or a similar restriction needed in order to sell, that can be an indication of personal goodwill rather than enterprise goodwill. That’s because part of the business’s value rests on your reputation as an individual rather than the business itself.
However, a noncompete does not mean there is no enterprise goodwill. The court may find both and consider the enterprise goodwill in its valuation.
This case offers positive subsequent treatment of Thompson and Young. Personal goodwill should not be included in a business’s value, and if it is, the value might be overturned by the court.
“There was no proof of the existence of goodwill separate from the husband’s reputation…[and] there was no evidence that anyone besides the husband brought in clients to the company.”
“The most telling evidence of a lack of any [enterprise] goodwill was the wife’s expert’s testimony that no one would buy the practice without a noncompete clause. If the business only has value over and above its assets if the husband refrains from competing within the area that he has traditionally worked, then it is clear that the value is attributable to the personal reputation of the husband.”
Williams v. Williams, 667 So. 2d 915 (Fla. Dist. Ct. App. 1996)
This case provides positive subsequent treatment for Thompson and Walton. Goodwill can be divisible as a marital asset only if it is enterprise goodwill: it must be tied to the business itself, not the individual. Evidence of a required noncompete clause for the business’s sale points toward the existence of personal goodwill rather than enterprise goodwill.
“[F]or goodwill to be a marital asset, it must exist separate and apart from the reputation or continued presence of the marital litigant.”
“[T]he husband’s expert…stated that no one would buy the practice without a noncompete clause. This is telling evidence of a lack of [enterprise] goodwill.”
Oldham v. Oldham, 683 So. 2d 579 (Fla. Dist. Ct. App. 1996)
Over time, your business may increase in value. If a spouse is claiming a marital interest in a premarital asset, they must connect that appreciation in value to marital efforts, marital funds, or other marital assets. If the business’s appreciation is not connected to marital assets, it should be considered nonmarital.
“[A]bsent a showing that either marital funds, assets, or the work efforts of one or both spouses contributed to the enhanced value of the asset, the appreciated value of one spouse’s nonmarital asset occurring during the marriage is not subject to equitable distribution.”
Hough v. Hough, 793 So. 2d 57 (Fla. Dist. Ct. App. 2001)
This case offers positive subsequent treatment of Thompson. An expert must not consider personal goodwill when valuing a business.
“Proper valuations of assets are critical to the propriety of an equitable distribution scheme.”
“This overemphasized the effect of Mr. Hough’s personal goodwill…resulting in an artificially low valuation.”
Menendez v. Rodriguez-Menendez, 871 So. 2d 951 (Fla. Dist. Ct. App. 2004)
This case offers positive subsequent treatment of Robbins. Spouses should not be forced to continue operating as business partners; the court will award the business interest to one spouse. It is also important that a trial court decides how to distribute an interest with sufficient evidence of its value.
“[The] trial court erred in concluding, without sufficient evidence as to value, that the shares of Globalis should be equally distributed between the spouses. The parties correctly concede that this asset was not properly valued below and that it was improper for the trial court to leave the parties as joint owners of this closely held business.”
Manolakos v. Manolakos, 871 So. 2d 258 (Fla. Dist. Ct. App. 2004)
This case offers positive subsequent treatment of Robbins and Menendez. Spouses should not have to continue as business partners, but should award one spouse the business interest and the other a cash payout or other alternative.
“Dissolution of marriage being what it is, it is clearly an abuse of discretion for the trial court to order two parties who have stated they do not want to continue to work together after their divorce to do just that.”
Held v. Held, 912 So. 2d 637 (Fla. Dist. Ct. App. 2005)
When a business has a noncompete agreement, or similar instrument, that is an aspect of personal goodwill. While there can also be enterprise goodwill, noncompetes directly impact the seller’s ability to do business with existing clients, so they can’t be included in an enterprise goodwill calculation.
A business also cannot offer a “non-piracy” or “non-solicitation” agreement and expect the courts to treat it as enterprise goodwill instead of personal goodwill. Noncompete, non-piracy, and non-solicitation agreements all do the same thing: restrict the seller’s ability to do business with existing clients.
“For purposes of distinguishing enterprise goodwill from personal goodwill in the valuation of a business, there is no distinction between a ‘non-solicitation/non-piracy agreement’ and a covenant not to compete. Both limit the putative seller’s ability to do business with existing clients of the business.”
“The trial court’s valuation method inserted into enterprise goodwill an aspect of personal goodwill…[which] contravened Thompson.”
Erp v. Erp, 976 So. 2d 1234 (Fla. Dist. Ct. App. 2008)
Courts rely heavily on expert testimony to value a business. They may decide how much of an expert’s testimony is reliable and should be used for the value, but the final value must be based on sufficient evidence.
Courts also have discretion to apply a marketability discount when valuing a business in the context of a divorce. While marketability discounts are generally prohibited to avoid oppressing minority shareholders, divorce is a different context. For a dissolution or equitable distribution, courts may decide whether to apply a marketability discount.
“The decisions that judges make when valuing businesses in the context of a divorce are fact-intensive and usually heavily dependent upon the opinions of well-trained experts.”
“The question is not whether the trial court can employ one method or another in valuing a business, but is more appropriately phrased as whether an expert may be permitted to testify and render an opinion based upon a valuation method that the expert claims to be acceptable within his or her profession.”
“If the expert is permitted to so testify, then the trial court, as a finder-of-fact, should have considerable discretion in deciding to what extent it accepts or rejects the expert testimony.”
“Florida courts have generally accorded discretion to the trial court to determine, based upon the evidence and circumstances presented, whether a marketability discount should be applied in the valuation of a closely held corporation.”
Garcia v. Garcia, 25 So. 3d 687 (Fla. Dist. Ct. App. 2010)
If one spouse has stock in a closely held business, there may be a restrictive transfer agreement. In this situation, courts allow valuation by the net asset valuation method. The value of this stock depends on several factors, like exactly how restrictive the agreement is.
Your expert may try to argue that there should be a discount in the valuation due to the restrictive covenant. The court might accept this argument, but your expert has to offer a number and explain their reasoning. Here, the husband’s expert did not offer a discounted number, so the court accepted the wife’s expert’s valuation.
“Depending upon the circumstances of each case, different methods of valuation may reflect more accurately the actual value of the stock to the shareholder.”
“The net asset value methodology for valuing closely held businesses…was the most reasonable method of determining the value of former husband’s stock.”
“While former husband argues the trial court erred in relying on former wife’s expert’s valuation because it failed to ascribe any monetary significance, or ‘discount’ on the net asset value due to the restrictive agreement, neither did former husband’s expert provide such a calculation. As such, the trial court was left with values it was given and determined that the value provided by former wife’s expert was the most reasonable.”
Mistretta v. Mistretta, 31 So. 3d 206 (Fla. Dist. Ct. App. 2010)
When your business is valued by the court in a divorce proceeding, they will use all evidence to decide that value, including guesses about how your business will continue performing in the current economy. If new evidence arises, you may want to ask for a new valuation. However, that new evidence cannot simply show some change in circumstances since the trial, like a shift in the economy.
Valuations necessarily include guesses about the business’s future performance. Courts will not allow a new valuation if economic changes occur because no expert can predict with total accuracy the business’s future income.
“A cloudy crystal ball is no basis for a new trial.”
“Projections of future revenues and cash flows are, of course, pertinent in assessing the value of a business. But projections of future revenues, expenses and income necessarily depend, not only on known or knowable facts already in existence, but also on assumptions about that future that will not always, if ever, be entirely accurate.
“That the future in fact unfolds differently than business appraisers assume cannot be a basis for a new trial on the value of a business.”
Vanzant v. Vanzant, 82 So. 3d 991 (Fla. Dist. Ct. App. 2011)
This case offers positive subsequent treatment of Spillert. A trial court’s valuation must be based on substantial evidence, often from expert testimony. But, a trial court can’t pick and choose which pieces of expert testimony to follow without offering evidence and explanation for that choice.
“[T]he trial court does not explain how it arrived at the valuation, and no evidence was presented to support this valuation. It appears that the trial court simply ‘split the difference’ between the values presented by the parties.”
“The trial court’s valuation must be based on competent evidence and cannot be determined by ‘splitting the difference.’”
Jordan v. Jordan, 127 So. 3d 794 (Fla. Dist. Ct. App. 2013)
As seen in Turner, when an asset increases in value due to marital efforts, that appreciation is a marital asset and is divisible. However, if marital efforts are so integral to the asset, it can be transformed from a nonmarital asset into a marital asset.
Here, the wife herself (and substantial marital funds) nearly completely renovated the husband’s chiropractic building. While the business and the building were nonmarital property, that appreciation transformed the building into a marital asset.
“[T]hese actions went beyond mere maintenance and were improvements that enhanced the value of the building. These actions, combined with how the proceeds from the sale of the building were used, sufficiently transformed the nonmarital asset into a marital asset.”
Nelson v. Nelson, 206 So. 3d 818 (Fla. Dist. Ct. App. 2016)
Courts distinguish between a spouse’s ownership interest in their business and the actual assets that are owned by the business entity itself. Since the business is technically a third party, the court won’t distribute a business’s assets in a divorce proceeding. The court will divide the spouse’s interest, not the business’s separate assets.
“A trial court cannot, in a dissolution proceeding, adjudicate property rights of a non-party.”
“[T]his court has disavowed the equitable distribution of assets held by nonparty corporations, limited liability companies, and partnerships.”
Schmidt v. Schmidt, 120 So. 3d 31 (Fla. Dist. Ct. App. 2013)
This case provides positive subsequent treatment of Thompson and Walton. Personal goodwill may not be included in a business valuation, and a noncompete agreement indicates the presence of personal goodwill. Opinions from experts should indicate where there is personal goodwill, including if it arises from a noncompete, and deduct that from their valuation.
“[P]ersonal goodwill must be excised from the value assigned to the business for purposes of equitable distribution.”
“Personal or professional goodwill attributable to the skill, reputation, and continued participation of an individual is not a marital asset.”
“When valuing the enterprise goodwill of a business, the necessity of a covenant not to compete is significant as it signals the existence of personal goodwill, which cannot be included in determining the value assigned to the business for purposes of equitable distribution”
Bair v. Bair, 214 So. 3d 750 (Fla. Dist. Ct. App. 2017)
A business valuation cannot identify only the favorable assets of the company. All assets and liabilities must be valued, including a business’s real property, to find the total value. Real property is a major asset and cannot be excluded. A business’s value is the sum of all its parts, including all assets (major or minor) and liabilities.
“[T]he sum of all parts, not a select few, is what encompasses a business’s ‘value.’”
“[E]xcluding a major asset owned by a company from the valuation of that company is legally incorrect because the value of any company comprises all the company’s assets and liabilities.”
“To attempt to value a company while excluding several major assets owned by it…is plain error.”
Soria v. Soria, 237 So. 3d 454 (Fla. Dist. Ct. App. 2018)
This case offers positive subsequent treatment for Spillert and Bair. A business’s value must be based on all competent, substantial evidence. This evidence consists of the fair market value, any noncompetes, goodwill, and all assets and liabilities.
Here, the court did not provide evidence for their valuation and did not properly consider all of the company’s assets and liabilities. This provided an incorrect valuation that was overturned on appeal.
“[T]he essentially arbitrary par value assigned to ABC’s stock bears no relation to ABC’s fair market value.
“[T]he court was required to consider both ABC’s assets and liabilities when assessing its value.
Garrison v. Garrison, 255 So. 3d 877 (Fla. Dist. Ct. App. 2018)
This case offers positive subsequent treatment of Robbins and Manolakos. Spouses should not have to continue working together as business partners after a divorce. The court will award the business interest to one spouse and an equitable solution to the other.
“Compelling former spouses to remain in business together ‘creates [an] intolerable situation’ and constitutes an abuse of discretion.”
Kvinta v. Kvinta, 277 So. 3d 1070 (Fla. Dist. Ct. App. 2019)
This case offers positive subsequent treatment of Erp. The court has discretion to accept an expert’s opinion on using different methodologies to determine a business’s value. When a business has little to no records or documentation, an expert may need to use different methods to find its value.
Here, the expert used the coverture fraction method because there were not many business records. The company had been bought and sold in the Middle East, with no financial records during the time the husband owned an interest. The court determined that under these circumstances, the expert’s methodology used in his testimony was reliable.
“The trial court adopted the methodology employed by Former Husband’s expert as reasonable under the circumstances, and found that it provided an equitable means to determine the value.”
“Former Husband’s expert was experienced in valuing businesses and offered a reasonable approach to valuing Saba & Co…”
Palmer v. Palmer, No. 5D19-2389, 2021 WL 1430980 (Fla. Dist. Ct. App. Apr. 16, 2021)
This case provides positive subsequent treatment of Erp. When a court needs to determine the fair market value of a business, different methods may work better for different situations.
Here, while trying to value the husband’s stock in a closely held, family-owned corporation, the expert showed the court the different valuation methods. The expert decided to use the capitalization of earnings method and provided evidence of how the facts fit the chosen method.
“This expert…thoroughly explained the various acceptable methods in his profession for valuing a business and why he chose to use the ‘capitalization of earnings’ methodology in this case.”
“[The] trial court’s acceptance of Former Wife’s expert testimony was well within its considerable discretion and that the values determined by the court…were supported by competent substantial evidence.”
King v. King, 313 So. 3d 887 (Fla. Dist. Ct. App. 2021)
This case offers positive subsequent treatment of Bair. A business is the sum of all its parts, including all assets and liabilities. Here, two competing experts offered drastically different opinions, but one of them excluded the business’s liabilities, leading to an overvaluation.
The value of a business must be based on all the substantial and accurate evidence.
“In determining a company’s fair market value, a trial court making an equitable distribution must consider all the company’s assets and all its liabilities. It is error to exclude either one.”
Rosenberg v. Rosenberg, 391 So. 3d 975 (Fla. Dist. Ct. App. 2024)
If you are part of a multi-member practice, you can’t take advantage of the other members’ personal goodwill in a business valuation. Usually, a large part of the multi-member practice’s value comes from the personal goodwill of all their members. This can’t be lumped into enterprise goodwill because it can’t be separated from the individual, whether that individual is the divorcing spouse or another member of the practice.
Here, an expert valued an anesthesiologist practice by excluding the divorcing spouse’s personal goodwill, but including all the other members’ goodwill as enterprise goodwill. This nearly doubled the value of the business. The court established that all personal goodwill must be deducted from a business, even in a multi-member practice. Each member’s personal goodwill must be subtracted to provide an accurate value of the divorcing spouse’s interest in the business.
“[P]ersonal goodwill of a professional is simply not a marital asset in Florida. Personal goodwill, whether it be that of a divorcing spouse or any one of thirty-four physician/shareholders in a medical practice, is not a marketable asset distinct from the individual who performs services.”
“Because personal goodwill cannot be considered in the division of marital assets, and is not a part of enterprise goodwill, it must ipso facto be excluded in calculating the value of a purported marital asset in a dissolution proceeding.”
“Just as [former husband’s] personal goodwill is his own non-marital asset, the personal goodwill of the other thirty-four physicians is their own non-marital asset…”
Conde-Berrocal v. Conde, 391 So. 3d 518 (Fla. Dist. Ct. App. 2024)
This case offers positive subsequent treatment for Rosenberg. The court here also reiterates that evidence of a noncompete agreement indicates personal goodwill within the business. Personal goodwill is not divisible as a marital asset.
“The restrictive covenant itself, of course, is the strongest indicator of the evidence of personal goodwill.”
“Any value which attaches to the entity solely as a result of personal goodwill represents nothing more than probable future earning capacity…” (quoting Thompson)
Athea v. Athea, 395 So. 3d 564 (Fla. Dist. Ct. App. 2024), reh’g denied (July 18, 2024)
This case offers positive subsequent treatment for Walton. Evidence of a noncompete is indicative of personal goodwill, which cannot be used to value a business.
“[B]ased upon the Former Husband’s unique role and contributions to the business and the five-year non-compete covenant he signed, a significant amount of personal goodwill existed.”
Donahue v. Donahue, 398 So. 3d 1052 (Fla. Dist. Ct. App. 2024), reh’g denied (Dec. 20, 2024)
While evidence of a noncompete agreement usually indicates personal goodwill, it doesn’t outweigh an individual’s actual role and conduct at the business. A court must look at all the surrounding facts, not just the noncompete.
Personal goodwill can be found by showing that the business depends on an individual’s skills or reputation. If a business does not depend on that individual, as seen in this case, there is not personal goodwill. The business in this case did not suffer at all after the individual’s departure, so the divorcing spouse couldn’t argue that it was improperly valued.
“[T]he value of the business did not decrease with the former owner’s departure. In other words, the value followed the book of business itself and was not dependent on the identity of the owner.”
“Although the Former Husband makes much of the existence of a noncompete agreement, the agreement alone does not transform the entire nature of the business…”
Busto v. Arias, 406 So. 3d 1019 (Fla. Dist. Ct. App. 2025)
This case offers positive subsequent treatment of King. The court must determine the fair market value of a business. To do so, it must consider all the business’s assets and liabilities.
When parties don’t provide experts, a trial court must choose and apply its own methodology to value a business, considering all substantial and competent evidence. The court has discretion to decide what that methodology is and they must explain their reasoning.
“Here, where neither party proffered expert testimony regarding a method of computation, the trial court was within its discretion to adopt a valuation that is supported by competent, substantial evidence.”
“The trial court utilized a legitimate method of calculating valuation, showed its calculations, and relied on competent, substantial evidence in the record.”
If you or your spouse own a business and you are contemplating divorce or are in divorce proceedings, contact my Naples, Florida law office for a free consultation.
Russell Knight has been licensed as an attorney in Illinois since 2006 and in Florida since 2018. Russell Knight focuses his practice on family law and divorce with special attention to the challenges business owners and their spouses face during a contested divorce.
