What If My Spouse Or I Own A Business?
Q. What if my spouse or I own a business? How will it affect our divorce?
A. Businesses can be classified as a “marital asset.” Florida law defines “marital assets” as assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them and the enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage. What that means is that if you start a business during the marriage, even if it is titled in your name only, then the business is a “marital asset”. Likewise, if you started a business before getting married, and then the value in the business was enhanced due to marital funds or labor, then the enhancement in the value of that business is a “marital asset.”
Depending on the size of the business, it may need to be joined to the case as a third party. This is especially true if there are other shareholders in the business who might have an interest in how it is divided as part of the divorce case. Additionally, if there are concerns that one spouse may mismanage the business or use the business to hide marital funds while the divorce is pending, the Court can place restrictions on the business’ activities to prevent this from happening, and even appoint a third party receiver to manage the business finances while the case is pending.
In Florida, the Courts are required to equitably divided all marital property. Generally, this means that they will award each spouse fifty (50) percent of all marital assets. If your business is, in whole or in part, a marital asset, then it will need to be valued so that it can be equitably divided. You may need to hire a third-party professional, such as an accountant, to determine the value of the marital interest in the business. As with any other asset, the marital interest in the business may be awarded to either Party, or, depending on the circumstances, it may make the most sense to sell the business and have the Parties split the proceeds.
If you own a business, there are many different factors that need to be taken into consideration when filing for a divorce. We recommend meeting with an experienced attorney to discuss the facts specific to you and your business to get a more in-depth understanding of how a divorce may affect your business. Max Factor has extensive divorce experience with over 25 years of experience. Contact Max today to schedule a consultation to review your divorce case.