Personal Goodwill in a Florida Divorce: You Can’t Pour from an Empty Cup

Originally published in FAMSEG: The Family Law Section eNews (February 2026), a publication of the Family Law Section of The Florida Bar. Republished by the author. 

Time and time again, a sophisticated client walks into our office having done their research on business valuations for divorce in the State of Florida. Depending on who you ask, you may hear, “The business is nothing without me!” or “The business runs itself!”

Oftentimes, this conversation is premature, as it is easy to lose sight of basic valuation concepts in this setting. Before we can discuss whether a company’s goodwill relates to a person (and therefore non-marital) or the enterprise (and therefore includable in the marital estate), we must first determine whether the company has any goodwill to begin with. Because you can’t pour from an empty cup.

Goodwill, by definition, is an intangible asset representing future economic benefits arising from a business or a group of assets that are not individually identified or separately recognized. Goodwill may arise as a result of name recognition, reputation, customer loyalty, location, products, among other factors.

From a valuation perspective, goodwill is typically reflected in excess earnings generated above and beyond a fair return on identified assets. In other words, the total value of a business must exceed the value of its identifiable net assets before goodwill can exist. Often, the total value of a business, including any resulting goodwill, is determined by using a market-based or income-based approach to valuation.



Florida Statute § 61.075 provides that the standard of value of a closely held business in a Florida divorce is Fair Market Value, which “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.”

A business valuation under the fair market value standard must measure three things from the perspective of a willing and able buyer and seller: (i) expected economic benefits, (ii) the risk of achieving those economic benefits, and (iii) the expectation of growth in those economic benefits.

In seeking the answer to the question, “What is the business worth?”, business valuators must address numerous issues, including: Are owners paying themselves a fair market wage? Are there any economic benefits that are not expected to recur? Is the risk of the business disproportionately dependent on the continued involvement of the owners, key employees, major customers, or critical suppliers?

Before debating whether goodwill is personal or enterprise, it is essential that practitioners first confirm that goodwill actually exists. When earnings are properly normalized and business risks are assessed from a buyer’s perspective, the personal versus enterprise goodwill distinction often becomes far less significant.

Jason Soman, CPA/ABV, ASA, CFE, CDFA® is the Managing Partner of Soman Forensic & Valuation CPAs in Boca Raton, Florida, with offices in Naples, Tampa and satellite locations in Orlando and the Panhandle. Mr. Soman specializes in advising legal counsel and clients on issues relating to business valuation, spousal support, and other financial forensic matters in divorce. Learn more at www.somanforensics.com.