Dividing a Business During a Divorce
Dividing a business as part of a divorce settlement can present special challenges. Suddenly, every asset a couple has ranging from houses and jewelry to the business can become a bone of contention. There are assets that spouses are willing to part with and there are others to which each spouse will feel they’re entitled.
The first thing to remember is that there are a number of variables involved. A business is an asset and it needs to be evaluated and valuated. Typically, the person that founded and operated the business will retain ownership through the simple expedient of buying out their spouse’s share. The court will have to decide if it will be categorized as separate or joint property.
Separate property is an asset that each spouse owned before they married or was inherited. Joint assets are those that a couple acquired after they were married. However, separate property that contributed to the marriage or was used to support the marriage may be deemed as a marital asset. A business may be determined as marital property if it was used as the family’s support.
A professional appraiser will need to come in and look at the company’s records. He/she will include other factors in the assessment to determine its worth. The property’s condition, any equipment, products, and customer lists will be evaluated. Bank accounts and all financial records will be included to obtain an accurate picture of the business, its worth, and how it should be distributed.
The court may decide that a spouse is entitled to a portion of the business for their maintenance requirements or that of any children. The worth of the property may be based on its liquidation value or that of an ongoing business by the courts. The court may choose to use an assessment approach based on the business income, the business as an asset, or its market value.
Whether you need a Divorce, are dealing with Custody or Child Support issues, or need representation in a Personal Injury matter, the Law Offices of Theodore H. Enfield can confidently assist you. To learn more about how we can help you or to discuss the facts of your case with our attorneys, call to schedule your free consultation.