Is My Spouse Entitled To Half Of My Business In A Florida Divorce?
“What’s mine is yours and what’s yours is mine.” This is a motto most married couples live by, and happily, but when a divorce is on the horizon, the motto suddenly becomes, “What’s mine is mine and what’s yours is mine.” Everything – from the shared home to the family vehicles – is up for negotiation, with some assets being divided, and others going solely to one party. There are some assets that each party is happy to split or part ways with, while there are others that each party feels solely entitled to. One of those latter assets is a business.
Many business owners worry that when they get a divorce, their spouse will automatically get half of their business, but unless you and your spouse were equal business partners, this is oftentimes not the case. A business is an asset, and as such, it needs to be characterized, valued, and divided as one. Just as with a house, or a car, or anything else of value, a business needs to be characterized as marital estate, separate property, or a combination of both. It also needs to be valued so that – should it be characterized as marital estate – it can be properly divided.
Is The Business Separate Or Marital Property?
In order for the courts to determine just how much of your business your spouse is entitled to, they first need to determine how the business is categorized. When categorizing your business, you would use the same set of rules as you would for any other asset. Separate property is property that you each owned before you married, or that was passed down through an inheritance. Marital estate would be property that you acquired during marriage. And separate property that contributed to the marriage or that was used in support of the marriage can become marital property.
Oftentimes, either the business itself becomes marital property, or the value of the business becomes marital property. Either way, because the business was used to support the marriage and/or family, it is now considered a marital asset.
Valuing The Business As An Asset
Valuing a business can range in difficulty, depending on how cleanly the records are kept. However, the basic factors that the person assessing the business will consider are: the physical property, such as real estate, equipment, and buildings; stock of raw materials and amount of finished product; customer lists; bank accounts; and accounts receivable. In order to get the most accurate appraisal of your business, consider hiring a professional appraiser.
Dividing The Business
Once the business has been characterized and valued, it can be distributed properly. More often than not, the spouse who founded and operated the business will retain ownership of the business post divorce by buying out the other spouse for their valuated share.
In some instances, when a spouse buys out the other, the valued amount goes towards spousal maintenance. However, it does not go towards the spousal maintenance award determined by the courts, but is an additional sum to be paid monthly along with the spousal maintenance.
Hire A Florida Divorce Attorney
At the Law Offices of Schwartz | White in Boca Raton, our experienced divorce attorneys help our clients get the divorce settlements they deserve. Oftentimes, this means helping a client keep a majority of the business they worked so hard to build and maintain. If you own a business and are worried that your spouse is going to get more than his or her fair share of it in your divorce, contact our family law attorneys at 561.391.9943 or online to schedule your consultation today.