Business owners going through a divorce have unique concerns. Though the divorce may be necessary, they naturally want to keep the business they have worked hard to build up. At the same time, Florida’s divorce laws require equitable division of assets between the spouses.
The first thing you need to know is that “equitable” division of property does not mean you must split up all your assets 50-50. In reality, you and your spouse have a great deal of flexibility to find a settlement that preserves your business ownership interest and will be accepted by the court as fair to you and your spouse.
Step one: marital vs. nonmarital property
The first step when determining the fate of your business ownership share is to figure out if it is marital property or not. Marital property is either 1) anything you or your spouse acquired during the marriage, or 2) assets that you or your spouse owned before the marriage that has become comingled with your spouse’s property, such as when you and your spouse open a joint savings account using money you earned before the marriage. If your business is not marital property, your spouse has no ownership claim on it.
Separating marital from nonmarital property can be complicated. Your attorney will help you with this.
Step two: business valuation
Next, if your business is marital property, you need an accurate and up-to-date valuation. This is to make sure you know exactly what the fair market value of your business is, and what your spouse might expect as their share. Spouses often disagree on business valuation amounts, which is why your lawyer should be experienced in business valuations and litigation.
Step three: negotiating a settlement
Once you have reached a business valuation, your attorney can begin negotiating a settlement. In many cases, you can buy out your spouse’s share and preserve the business in your hands. If you and your spouse cannot agree on a negotiated property division settlement, you may need to go to court for the judge to decide.
Working with the right lawyer is key
Your business is worth fighting for, but you cannot do it alone. A family law attorney familiar with the issues business owners face in divorce can give you valuable advice about how to proceed.