Owning Your Own Business While Dissolving A Marriage
There are many benefits to owning your own business, you have independence and flexibility in your work, and you are in charge of meeting and exceeding your financial goals as you are in control of your client base and cash flow. But while being the boss of your own business can be a rewarding experience, divorcing as a business owner can be complex and overwhelming.
In Florida, dividing business assets during a divorce is not always simple and easy. However, with proper planning and the help of a qualified Port St. Lucie family law attorney, it’s possible to navigate this process successfully.
Identify and Value Business Assets
Asset identification is part of the divorce process. When assessing all of the assets that belong to your business both tangible and intangible factors will be analyzed. For example, tangible assets include property, inventory, and equipment, while intangible assets are resources such as intellectual property, patents, and trademarks. Of course, businesses carry debts as well, so both assets and liabilities will be reviewed.
Next, you will need to determine which assets are considered marital property and which are considered separate property. In the state of Florida, any property acquired during the course of a union is considered marital property. So if you built the business and acquired the assets during the years of your marriage, those assets are subject to division during a divorce. However, if the business was started prior to when you got married, or if it was inherited or gifted to you, it may be considered separate property.
Once the marital assets and liabilities are identified, their value will be determined. There are a few different methods that could be used to come up with a valuation figure.
- Income-based approach, meaning the business’s income and cash flow is assessed to determine its value.
- Asset-based approach, meaning the business’s assets and liabilities are calculated in order to land on a valuation.
- Market-based approach, meaning the sale prices of similar businesses will be surveyed in order to determine the value of the business.
Valuing a business can be a complex process, working with a qualified business valuation expert is advised in many circumstances.
Co-Ownership, Buyouts, or Selling the Business
After value has been determined, the next step is agreeing on how the business assets will be divided. Often one spouse buys out the other spouse, which allows them to retain the business and continue as an owner. But others opt to sell the business and split the proceeds, or to draft a co-ownership agreement, as single business owners who are no longer married.
Share your objectives with Port St. Lucie family law attorney. Then, a path forward will become clear and you can focus on next steps.
Are you a business owner who is perplexed when it comes to asset division and divorce? Talk to the legal team at Baginski, Brandt & Brandt about asset distribution and your goals for the future. How you feel about maintaining, dissolving, or securing your business will impact next steps and negotiation strategies. Contact us today to schedule an appointment.