Equitable Distribution Is Not A Business Expense
In Florida, divorce courts do not always divide marital property equally in a divorce. Equitable distribution, which means dividing a couple’s marital assets in the fairest possible way, is complicated enough when the only assets being divided are bank accounts, vehicles, and equity in the marital home. The opportunities for disagreement over equitable distribution are many. In some cases, the parties disagree about whether a certain asset is marital; only marital assets can be divided in a divorce, whereas each spouse keeps their own non-marital property. In other cases, the parties disagree about one spouse’s genuine financial needs, in other words, about whether all the expenses listed by the spouse are truly needs or if some of them are merely wants. Still other equitable distribution disputes hinge on the value of a certain marital asset. Businesses, whether both spouses or only one has ownership interest, are among the most difficult assets to value, because their income and expenses are always changing, never mind that “business expense” is a fairly subjective term. If business disputes are at the center of the property disputes in your divorce, contact a Palm Beach County divorce lawyer.
Dividing the Family Business in a Divorce
While Heather and Michael were married to each other, she worked as an insurance agent. The couple’s main source of income, however, came from a mobile home park, which was titled in both parties’ names, although Michael was the one who managed it. The parties were only married for four years, which means that the courts interpret “equitable distribution” as meaning dividing the marital property in such a way as to return each party to his or her pre-marital standard of living. When the couple divorced, Heather relinquished her share of ownership in the mobile home park, in exchange for Michael paying her $525,000.
The court ordered Michael to pay Heather for her share of interest in the mobile home park in installments. He was ordered to pay $16,667 per month for six months, followed by 72 monthly installments of $6,458. Since the payments included three-percent interest, Michael counted them as business expenses in his accounting records. This considerably reduced his income when it came to calculating the amount of child support.
Heather appealed the aspects of the court’s decision that related to the calculation of child support. She argued that, by counting the equitable distribution payments as business expenses, Michael was trying to have his cake and eat it, too. The court agreed with Heather’s arguments and re-calculated the value of Michael’s business without counting the payments to Heather as business expenses.
An Attorney Can Help You Today
Even if you and your spouse were only married for a short time, and business interests that you owned together are marital assets subject to equitable distribution. A Boca Raton divorce lawyer can help you get a fair payout for leaving the marital business because of your divorce. Contact Schwartz | White for help with your case.