Double-Dipping and Business Valuation in Divorce: Strategies to Avoid Twice Distributing the Same Income

This CLE webinar will offer guidance to family law counsel grappling with the complex issues of double counting of income that surface when the parties capitalize the income from a business or professional practice to establish its value for purposes of equitable distribution and then order payment of that same income as future maintenance or support payments. The panel will discuss how to determine if double counting (or double dipping) even occurred, the confusing methodologies used to address the problem, what happens if the double counting problem is not solved, and how to avoid the inequitable result of twice distributing the same income.

When courts distribute the value of a business or professional practice but fail to adjust the business' income stream when calculating spousal support, they create a suffocating and virtually insurmountable burden for the payor spouse, a problem known as double counting or double-dipping. Furthermore, identifying double-dipping can be challenging.

Courts are divided as to whether double-dipping should ever be permitted to achieve an equitable outcome. Some jurisdictions entirely allow or prohibit double-dipping, while others take a case-by-case approach and consider the facts and circumstances of each divorce. Many approaches have proven difficult to apply while also generating questionable results.

Listen as our esteemed panel discusses the complex issue of double counting that can arise in business valuation and calculation of spousal support. The panel will offer guidance on identifying and distinguishing between assets and income, review the differing judicial approaches to double-dipping and asset distribution, and provide strategies for structuring settlements.