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California Law - At What Date Do We Value the Business? According to the statute, the business is valued as close to the time of the trial as possible. However, the court may use a date between separation and trial, if a party shows a good reason why another date accomplishes an equal division of the community estate in an equitable manner. For example, if a party has, by value of hard work after the separation, substantially increased the value of the business, then the business should be valued closer to the separation date. Section 2552 (b). Cases: Stephenson (1993) 24 Cal Rptr 2d 411, 20 Cal App 4th 250 (small businesses are often valued at the separation date). Kilbourne (1991) 284 Cal Rptr 201, 232 CA 3d 1518 (law practice valued at separation date; time rule applied to determine community property portion of value). Barnert (1978) 149 Cal Rptr 616, 85 CA3d 413. In general, you value community property as near to trial as reasonably practicable. But for businesses, you value at separation date. Earnings and any increase in value after the separation belong to separate property. King (1985) 179 Cal Rptr 716, 150 CA 3d 304. Business goodwill should be valued as of the separation date.
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