Three Ways To Divide A Business During Divorce
Dividing debts and assets during the divorce process is always tricky. When you or your spouse own a business, though, dividing this asset is even more complex. Even when one spouse solely owns a business, it is usually still subject to Florida’s equitable distribution laws. This is due to the fact that even if a spouse started the business before the marriage, the fact that they continued to run it after the wedding means it is a marital asset. Profits from a business are also often used to support a family and household, and commingling those assets with others also makes them marital property.
When dividing a business during divorce, couples generally have three options. Below, our Brandon property division attorney explains what these are.
Buying One Spouse Out
It is not uncommon for one spouse to want to continue to operate the business, while the other has no interest in doing so. In these cases, the simplest way to divide the business is for one spouse to buy out the other. When one spouse buys out the other, the business must be accurately valued to determine what it is worth. This is a complex process that often requires a Brandon property division lawyer and other experts.
Once the business is properly valued, the party buying out the other may pay a lump sum to solely own the business. Another way to buy out a spouse more affordably is to set up a loan. In this scenario, the spouse being bought out is given regular payments until they have received an amount that is the equivalent of their fair share of the business.
Selling the Business
Selling a business may sound fairly straightforward, but it is not. Firstly, the spouse that mainly ran the business may feel a significant loss if it is sold. Additionally, before selling, the business must be accurately valued, and a buyer must be found, which is not always easy. Couples also often disagree about how much the business is worth, the buyers they are considering, and more. This type of conflict will make selling a business much more complicated.
Owning the Business Together
It is not always possible for spouses to co-own a business together after a divorce, but there are times when it is the best option. Before you agree to co-own a business with your spouse, you must first ensure that you and your spouse can work together amicably, even if your marriage did not work out. If you cannot do this, the negative tension will affect the entire business as a whole. Using alternative dispute resolution methods such as mediation or collaborative law can help reduce conflict during the divorce, which can make co-owning a business afterwards easier.
Our Property Division Lawyer in Brandon Can Advise on the Best Option for You
If dividing a business is going to be part of your divorce, let our Brandon property division lawyer assist with your case. At Koether Law, P.A., our seasoned attorney can explain your options in-depth and help you determine which one is right for you. Call us now at 813-347-8193 or contact us online to schedule a consultation and to learn more.