When someone is a business owner, they have often worked very hard to get to where they are today and are putting forth a continuous effort to keep the business running and profitable. Because of this, when a marriage involves a business and approaches a divorce, that couple’s situation becomes very complicated and emotional. Not only are they dividing their marital property, but their business which they are likely very passionate about will be at risk.
It is completely understandable why business owners stress about a divorce because there is so much at stake. When they have the right representation, though, they can eliminate much of the stress and gain confidence that they are making the right moves. In addition, being knowledgeable about the situation at hand can make a significant difference. To help someone in this situation get started, below are some of the considerations that business owners should keep in mind when approaching a divorce:
Each Business is Unique
No two couples are the same which makes each divorce unique, and the same way of thinking can be applied to businesses. Each business has its own unique characteristics, which means that the best method to value and divide the business is not the same for everyone. Knowing this while approaching the divorce may help a business owner keep an open mind.
There Are Multiple Business Valuation Methods
A business valuation is not a “one size fits all” process, and there are many methods to consider. The three most common methods are: a market-based approach, income-based approach, or asset-based approach. The best approach to employ will depend on the business and the facts involved in the case. Leaning on an experienced attorney during this process will be key.
RELATED: Learn more about business valuation and divorce.
Facts Are Important
A divorce which involves a business is often less about specific laws and more about the facts of the situation. As one might expect, if the business was acquired during the marriage, it will most likely be considered a marital asset. If it was acquired prior to marriage, though, this does not mean that the other spouse will not be able to take value from it. There are many factors that will be considered such as financial and labor-related contributions, support of the family and household from one spouse while the other spouse runs the business, etc. Therefore, the facts in each individual case can be a significant part of the divorce process.
Owning a business during a divorce can create additional complications during the divorce process. Luckily, an experienced divorce attorney will be able to guide you through the process for your unique business situation. If you find yourself in a complex divorce situation, such as one that involves a business or multiple business interests, our attorneys who are well-versed in complicated family law matters can help. Contact us now to set up a consultation however it is most convenient for you—via telephone, video, or in person.
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