What Happens to Your Business in Divorce?
You’re considering divorce, but are worried about much more than the marriage itself. You own a small business, which means the possibility of splitting could have a major impact on your livelihood. You have all kinds of questions: Will your spouse be entitled to a portion of your business? Is it possible you’d have to liquidate and give half of the profits away? How might that affect your future? A divorce attorney who is familiar with exactly this type of scenario can answer these questions, and more. At WiseLieberman you can be sure you’ll get the guidance you need moving forward.
Will the Business be Shared?
As an equitable property division state, the court must consider an array of issues when weighing how to address business interests in a divorce:
- Assuming the business was formed or acquired during the course of the marriage, it would probably be considered marital property, even if only one partner was involved in operating it.
- In the event the company was run by a couple together each party would have an equal claim to the business. In some cases, perhaps one person would be forced to buy out the other, either in a lump sum or over time. Another option is to liquidate the company and split the net value between the partners.
- What if the business was inherited, or the funds to start it were inherited or gifted to only one spouse? It might then be considered non-marital property—meaning the other partner would have no claim to it—with certain caveats related to the non-owning spouse’s contributions to the family.
- If the business belonged to one partner prior to the marriage, it could be considered separate property, with a few provisions similar to those above. The court will contemplate the value of the business at the time the couple got married, as well as any contributions that the new spouse made to either the business, or to the family over the course of the marriage. In the event, for example, that the contributing partner subsidized the business or took care of other family obligations to free up the business partner, they would probably have a claim for some portion of the company. In this situation the business might be viewed as partially marital property and partially non-marital property. The goal of the court will be to provide an equitable outcome for both spouses.
Determining the Fair Value of the Company
Calculating the net value of the company will be central to negotiations. Forensic accountants who are accustomed with this sort of thing will scrutinize a number of factors toward that end. Those factors include:
- Financial statements;
- Capital;
- Investments;
- Tax records;
- Inventory;
- Overhead costs, including wages, insurance, etc.;
- Receivables in relations to payables.
These each contribute to the company’s value, as does the location, reputation, and longevity of the company. The forensic accountant may be hired by either spouse, or the cost can be split between both partners. In some cases, the court will appoint an investigator at the request of one or both individuals involved.
Your Aggressive Attorney
Any divorce has its own tricky issues to negotiate. If yours involves a personal business, you’ll need an aggressive and ethical attorney dedicated to protecting your interests. At WiseLieberman that is exactly what you’ll get. Contact our Boca Raton divorce lawyers for a confidential consultation.
Source:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0061/Sections/0061.075.html
