Dividing a Business in a Divorce
By Saunders Law Group on September 10, 2018
Divorces can be difficult and drawn out. The realities of these kinds of proceedings are why it’s important that you work with an experienced divorce attorney who has your best interests in mind. Thomas C. Saunders and his entire team have helped countless people in the greater Lakeland, FL area with a host of family law matters.
Major disputes may arise when a married couple must divide or even dissolve a business. The team at Saunders Law Group would like to consider some facets of dividing a business in a divorce.
Traditional Division of Assets and Debts
In any divorce, assets and debts are classified as separate property or marital property. Separate property tends to be property that a person has before the marriage. Marital property is property that the married couple acquires in the course of being married. During a divorce, spouses get to keep their separate property and then evenly distribute their martial property.
It is possible for separate property to become marital property, such as when a married couple moves into a home that one of the spouses owned before marriage.
What Type of Property Is a Business?
Businesses pose a number of challenges with regard to their classification. If you retain the business on your own, the business may be separate property though the earnings from the business could be considered marital property. If a married couple starts a business together after marriage, the business is considered marital property.
Keep in mind If your spouse participated in the business or was a partner in the business, there could be questions about how the business should be split or how much the spouse contributed to the success or failure of the business.
Valuation of Your Business
The first step in a divorce when there is a business between spouses is to get a professional valuation of the business. This will require an expert to evaluate the financial records of the business, cash flow, overhead, and the overall goodwill that customers or clients have toward said business. The expert will also determine external factors given the type of business and its locations to determine the fair market value for the business.
How the Business Will Be Divided Along with Other Property
During a divorce, if a spouse is set on retaining a business, the other spouse may receive assets that equal the fair market value of the business. This allows an equitable distribution of assets between the spouses in accordance with Florida laws. A spouse may also offset the value of the business by taking on an additional share of the marital debts.
What Happens When Disputes Over the Business Arise?
Obviously disputes can arise when both individuals in a divorcing couple think they have a claim to ownership of a business. In these cases, other assets and debts are immaterial since there is a sense of ownership with regard to the business. Emotions can run extremely high, exacerbated by other issues during the divorce.
How Divorce Attorneys Can Help
Having an attorney on your side is essential for having a divorce that goes as smoothly as possible. They will be objective mediators, keeping the proceedings as professional as possible and negotiating for fairness with your interests and your spouse’s interests in mind.
This expert counsel can make a major difference, especially when it comes to difficult divorces or complicated business relationships. We are here for you.
Contact Saunders Law Group
To learn more about dividing a business during a divorce and your legal rights, be sure to contact out team of family law attorneys. The team at Saunders Law Group can answer all of your questions during this trying process. You can also contact our law office by phone at (863) 533-6200.
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