Considerations for Florida Business Owners During Divorce

Tampa divorce, debt and asset attorneys in Florida

Divorce is never easy and ending a marriage always has the potential to become complex. However, if you are a business owner, the matter can become even more complicated and you may have even more to lose. In most cases, businesses are considered marital property and so, they are subject to property division. Below, our Tampa asset and debt attorneys explain how a business is divided during divorce, and the options available.

Businesses as Marital Property During Divorce

In Florida, marital property includes any assets or liabilities acquired during the marriage by the couple. As such, if a business was started after the marriage was official, it will be considered marital property.

Even if the business was started prior to the marriage, however, it may still be considered marital property. This is particularly true when marital funds were invested in the business. Additionally, if the business increased in value during the marriage, that would also classify the increase in value as marital property.

In general a passive increase in a pre-marital business’s value without any marital funds or contributions by either party would mean the increase would probably be deemed non-marital. However, if marital funds or either party contributed to it’s increase in value during the marriage, that increase would be marital.

Valuing a Business During Divorce

Before a business can be divided during divorce, it first must be valued. Valuing a business is always complex, as there are many factors involved. These include:

The company’s assets and liabilities
The revenue and profitability of the business
Expert valuations
Market analysis
The contribution of each spouse
The future earning potential of the business
Tax consequences associated with business division
The buyout options of each spouse

Valuing a business is always difficult, and the larger the business, the more challenges arise. It is critical to work alongside a lawyer, an accountant, and an expert appraiser who can accurately value the company.

Your Options for Dividing a Business During Divorce

As a business owner, you may worry that you will lose your business simply because you are ending your marriage. That does not have to be the case. There are many options available and they are as follows:

Buyout: You may decide to buy out your spouse’s interest in the business through installment payments or a lump sum.
Co-ownership: It may still be possible to continue operating the business with your spouse post-divorce. This is most practical when the two sides have a strong working relationship and have both contributed fairly equally to the business.
Offset assets: When one spouse does not want to directly buy out the other, it may be possible to relinquish other marital assets that are of equal or greater value than one party’s share of interest in the business.
Sale of the business: In some cases, there is no alternative but to sell the business and divide the proceeds between the two spouses. This is usually necessary when neither spouse is interested in running the business post-divorce or it is not financially feasible to buy one party out.

Contact our Tampa Asset and Debt Divorce Attorneys

If you are a business owner going through a divorce, you likely want to make sure it is protected as much as possible. At All Family Law Group, P.A., our Tampa asset and debt attorneys can provide the creative solutions you need to help you keep your business now, and in the future. Call us now at 813-672-1900 or contact us online to schedule a free consultation and to learn more about how we can help. Se habla Español.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0061/Sections/0061.075.html