TWhat Happens to My Business in a Divorce?
Divorce is a complex and multi-faceted process. It can be very emotional, too. In that sense, it’s a bit like running a business. Businesses are one of the first things that come up when we get questions about divorce. The State of Florida has statutes that seek even distribution of assets during a divorce. In an ideal situation, you will split your assets 50/50 – Including stocks, bonds, real estate, or other assets. Businesses are sometimes considered marital assets, which they factor into this split. A Marital Settlement Agreement or divorce judgment should address these assets.
The Division of Businesses
The first step of dividing a business is to find the true value of the business. A CPA can help determine the value depending on the size of the business. Larger businesses may need the help of larger organizations to determine their value. These include The Institute of Business Appraisers, the National Association of Certified Valuators, and others. Usually, an ongoing value estimate will help determine the value. An ongoing value estimate is the standard approach. This approach treats the business as if it would continue to operate for an extended period. Liquidation estimates also appear, which sets the value at the total of its liquid assets.
What About Small Businesses?
Are small businesses split up, too? It depends on how much money the business brings in. What if your business has little to no value beyond what it brings in? You could argue that the company shouldn’t be a part of the distribution of assets. This is especially true if that income is considered for alimony or child support. Therefore, It would be best to discuss this with a divorce or family law specialist. Every case is different, and there may be other considerations to make.
Is My Ex Entitled to a Business I Owned Before the Marriage?
Not as much as they might be if the business opened during the marriage. Businesses started during the marriage usually qualify as marital assets. If your ex contributed to the business in a way that increased its value, they might have a claim to that value. While you can often resolve these claims by reviewing data, there are things to consider. Balance sheets, gross revenue over time, and other financial data can help you here.
Note that this may become a protracted battle. Proving the valuation of a business can be difficult. Expert opinions on value can vary in a significant way. Thus, this is why working with a family law attorney is so helpful and essential.
Dividing assets can be a mess; nerves are often shot on both sides, and the process can be very stressful. As you might expect, an amicable divorce can simplify the process. A separated couple might choose to keep running as normal to maintain profits. Proper division and management of your business after your divorce are essential. It can make a huge difference in the final division of your assets. You’ll want to know that your business is being treated equitably.
An experienced attorney will make all the difference. The professionals at Thompson Law will help protect you and your assets and keep you informed every step of the way.