Owning a business can complicate divorce proceedings by raising questions about the ownership of the business, finances and the business’s future. When a marriage ends, however, the business does not have to be caught in the middle.
In Florida, the law provides business owners with options for limiting the impact of divorce on their company. However, the steps you take before and during a divorce can make a significant difference.
Steps Florida owners can take during divorce
Florida law generally begins with the premise that marital assets and debts should be divided equally during a divorce. However, when dividing the marital property, the court may order an unequal distribution when justified by the circumstances. The law also allows the court to consider whether keeping a business intact and free from the other spouse’s interference is desirable. You can take several steps to help protect your business interests, including:
- Keeping business and personal finances separate: Maintain your business and personal finances separate by using separate bank accounts and credit cards. Properly maintaining financial records can help distinguish business assets and liabilities from personal assets and establish the financial history of the business.
- Using a marital agreement: An appropriately drafted prenuptial agreement can address property interest, including any business interest. It must be in writing and signed by both parties.
Maintaining proper business records: Keep tax returns, financial statements, ownership documents and contracts. Accurate records may help prove the financial history of the business and its value. - Documenting when you started the business: If the business was owned before marriage, you should keep documentation showing when the business was established or acquired. Also, preserve documents showing its value at that time. It will assist in determining which portion of the business is nonmarital and which portion, if any, became subject to marital claims.
The Florida courts could decide if it would be best to allow one of the spouses to own the business without any interference from the other spouse during asset division. Depending on the circumstances, one spouse may keep the business and the other may receive other assets or a payment to account for their share.
What to consider as you move through the process
Protecting a business during a Florida divorce requires attention to both the legal structure of the business and the documentation you maintain over time. The earlier you address these considerations, ideally before a dispute arises, the more options you are likely to have. An attorney familiar with Florida equitable distribution law can help you assess which of these strategies applies to your situation and how to implement them effectively.