Divorce and Family Law Business Valuation in Tarrant County
Nail v. Nail, Von Hohn, and the personal-goodwill carve-out, done right. Twenty-plus years of community-property valuation work for Tarrant County family courts.
The personal goodwill problem in Texas divorce
A community-property valuation has to determine the value of the marital business interest as of the date of dissolution. That sounds simple. In a closely-held service business, it almost never is.
The trap is goodwill. In Texas, enterprise goodwill, the goodwill that belongs to the business itself, is community property and divisible. Personal goodwill, the goodwill that belongs to one spouse personally and would walk out the door with that spouse, is separate property and not divisible. Misallocating between the two can swing a settlement by hundreds of thousands of dollars in either direction.
The foundational Texas authority is Nail v. Nail, which held that the personal goodwill of a professional spouse is not a divisible asset of the community estate.
The modern application that practitioners actually rely on at trial comes from the Tyler Court of Appeals, which laid out methodology guidance for separating enterprise goodwill from personal goodwill in a closely-held practice.
How we handle it: a multi-factor analysis grounded in the Walton-line factors and their successors, supported by the documents we list in the intake checklist below, and presented as a separate, clearly-labeled section of the report so the trier of fact can see the carve-out on its own terms. The carve-out is the difference between a defensible report and a target-rich rebuttal opportunity.
What we value, and how
Closely-held operating businesses
Service businesses (medical, legal, accounting, consulting), light manufacturing, distribution, retail. Income, market, and asset approaches considered; conclusion supported by the standard of value applicable under Texas community property law.
Professional practices
Physicians, dentists, attorneys, accountants. Personal goodwill vs. enterprise goodwill is the central question, and the report treats it as such.
Investment entities
FLPs, LLCs, family-owned real estate holding companies. DLOM and DLOC analysis under Texas case law and current empirical studies.
Restricted stock and options
Vesting analysis and characterization between marriage date and valuation date. Coverture-style allocations where supported.
Tracing analyses
Separate-property contributions and reimbursement claims under Texas Family Code §3.402. Source-of-funds and clear-and-convincing tracing where required.
Comparative valuations
Date-of-marriage and date-of-dissolution valuations for separate-property carve-outs. Two valuation dates, one consistent methodology.
Standards we work to
The report cites every standard it relies on. Sophisticated readers expect this; the absence of it is itself a signal.
- SSVS No. 1 (AICPA Statement on Standards for Valuation Services) — governs the choice between a calculation engagement and a valuation engagement, and dictates report content for each. We pick the right engagement type with you at intake; the distinction is not a marketing label.
- USPAP — Uniform Standards of Professional Appraisal Practice.
- NACVA Professional Standards — current edition.
- Texas Family Code §3.001 et seq. — characterization of property as community or separate.
- Texas Family Code §3.402 — reimbursement claims.
- Texas Family Code §7.001 — the just-and-right division standard.
Calculation engagement vs. valuation engagement. Under SSVS No. 1, a calculation engagement applies agreed-upon procedures and produces a calculated value; a valuation engagement applies all procedures the analyst considers necessary and produces a conclusion of value. The two reports look different, cost different, and carry different evidentiary weight at trial. We pick the right one with you at intake based on scope, schedule, and the standard of value the case requires. Mislabeling the two is a Daubert and Rule 702 problem we will not create.
What we need from you at intake
This is the working list. Family law paralegals print this and bring it to the partner.
For the marital business
- Tax returns, all entities, last five years
- Internal financial statements, last five years (monthly if available)
- Year-to-date financials through the valuation date
- Articles, bylaws, partnership and operating agreements, buy-sell agreements
- Compensation history for both spouses
- Major contracts, customer lists (anonymized acceptable for the first pass), supplier agreements
- Lease agreements
- Loan documents
- Litigation history
- Prior valuations or appraisals
For the personal-goodwill analysis
- Spouse-owner CV, resume, biographical information
- Marketing materials and web presence
- Customer relationship documentation
- Non-compete agreements (existing or absent)
- Reputation indicators (awards, publications, leadership roles, board service)
How we report
The report is built for trial, not for a brochure. Executive summary, scope of engagement, valuation approaches considered (income, market, asset) with an explanation of why each was used or set aside, normalizing adjustments documented item by item, conclusions, schedule of opinions, methodology appendix, and a complete source-data inventory. Every opinion is tied to the document or analytical step that supports it.
We disclose under Rule 26 and TRCP 194.2(f) on the schedule the case requires. When a rebuttal report is needed, we produce one that responds to the opposing analyst’s specific opinions rather than a generic critique. Depositions are part of the engagement; we prepare for them the same way we prepare for direct.
Conflict check first, always. The conflict-check process exists so that an engagement on one side of a matter does not foreclose a future engagement on an unrelated matter, and so the analyst the court sees has been the analyst from day one.
Tarrant County family district courts
The Tarrant County family district courts we routinely produce work for:
- 233rd District Court
- 322nd District Court
- 324th District Court
- 325th District Court
- 360th District Court
Frequently asked questions
How long does a divorce business valuation take?
A calculation engagement typically takes three to five weeks from receipt of complete documents. A valuation engagement typically takes six to ten weeks. Rush schedules are available with notice; rush does not change the standard of work.
What is the typical retainer for a contested family law BV?
Engagement-letter terms vary by complexity and scope. Most contested-case retainers fall in a six-figure-low to mid-five-figure range; we provide a written estimate after reviewing scope at intake. We do not quote firm fees without seeing the matter.
Can you take both sides of the same case at different times?
No. Once we are engaged on a matter, we cannot take the opposing side, even on a different issue, without explicit waivers. The conflict check at intake exists for exactly this reason.
Do you handle the personal-goodwill carve-out specifically, or just enterprise valuation?
Both. The multi-factor personal-goodwill analysis is documented as a separate section of the report so the court can see the carve-out on its own and the opposing expert can address it directly.
What if the business has multiple owners and only one spouse is divorcing?
We value the marital interest under applicable Texas law on minority and marketability discounts (DLOM and DLOC), with explicit treatment of buy-sell terms if any govern transferability or pricing.
Will you testify at trial?
Yes. Direct, cross, and rebuttal. Testimony is billed separately at the rate disclosed in the engagement letter, and preparation time is documented.
Disambiguation: Harwell & Company is a Texas firm proudly located in Aledo, Texas, serving Tarrant County and the surrounding region. We are not affiliated with Harwell Valuation Advisors of Knoxville, TN.
Harwell & Company — 11816 Ferndale Lane, Aledo, TX 76008 — (817) 385-1866