Running a family business can be an ideal way to support the people that you love. Whether you have a professional degree that allows you to command excellent wages when you operate your own professional practice or you start a small manufacturing facility, your investment in a business can be a source of both income and personal pride.
If you start thinking about divorce, it is natural to worry about what will happen to the business and whether your spouse will continue to play a role in the company after your divorce. What typically happens to family businesses in Florida divorce proceedings?
The business may be marital property
Even if you already owned the business when you got married or inherited it from family members, investing marital income in the company or allowing your spouse to work at the business can muddy the waters and lead to claims of commingling, which can put at least some of the business’s value at risk.
Unless you have a marital agreement or thorough financial records establishing the business as your separate property, your spouse will expect you to include it in your property division considerations.
Accurate business valuation is important when planning to divorce
You need to know what your business is worth to make arrangements to split it with your spouse. Performing an accurate business valuation requires that you look not just at your projections for revenue and your upcoming major projects, but also your liabilities.
Financing on your equipment, funds due for employee benefits and other liabilities can diminish the overall value of your company and therefore reduce how much you have to share with your spouse.
You don’t have to divide the business to split its worth
The good news is that you don’t necessarily have to continue sharing business ownership with your spouse or close the company to pay them a certain amount of value. You may be able to continue operating the business without your ex’s presence if you reach an agreement with them. They might want concessions from you, but you may be able to negotiate arrangements that keep the property division process out of court and therefore fully in your control.
Identifying the most valuable assets that may complicate your New Jersey property division proceedings can help you prepare for your day in court.