How Are LLCs Treated In Divorce?
There are a number of factors that dictate whether or not a divorce will be particularly contentious. A couple’s willingness to negotiate and general ability to get along, for instance, is a major determining factor in how long a divorce will take and whether the parties will need to litigate the case. The types and value of a couple’s assets, however, can also play a role in the ease with which divorce proceedings are resolved. Couples who own businesses together, for instance, often face a number of hurdles when dividing that property, which can cause a divorce to drag on for months or even years. Grappling with these issues alone is often not possible for divorcing couples, so if you need help determining the fate of your own family business during divorce, consider reaching out to an experienced Fort Lauderdale property division lawyer for assistance.
LLCs as Marital Property
Classifying a business as a Limited Liability Company (LLC) has a number of different benefits. These kinds of organizations, for instance, allow business owners to keep their personal and business assets separate and are generally more flexible, requiring less paperwork than traditional corporations. An LLC could, however, end up causing contention in a divorce if it is deemed marital property and a couple is unable to agree on how to divide it. LLCs, like any other asset, will qualify as marital property if they were obtained during the marriage, regardless of who purchased or ran them, unless the couple entered into a postnuptial agreement, in which the fate of the company (in the event of divorce) was already decided.
Ultimately, whether an LLC is considered marital property will depend on a number of variables, including:
- When the LLC was created;
- Whether both parties invested in the company;
- Whether both parties contributed to the company during the marriage; and
- Whether a couple entered into any agreements regarding the eventual division of the LLC.
For help determining how these factors apply in your own divorce, please call our office today.
Equitably Dividing a Business
If an LLC is deemed a marital asset, then the property will need to be equitably divided if a couple decides to divorce. What this division looks like, however, will depend on a couple’s circumstances, including each spouse’s interest in maintaining the business and their willingness to negotiate. In some cases, for instance, one spouse will give up his or her ownership interest in the company in exchange for another asset of similar value. Alternatively, a couple could decide to sell the company outright and split the proceeds. Speak with a member of our legal team to learn more about your own options for dividing valuable marital assets, like a family business.
Call Today With Your Divorce-Related Questions and Concerns
Couples who co-own a business often face more complex decisions that have a higher financial impact when divorcing. For help determining the fate of your own business upon divorce, please call dedicated Fort Lauderdale property division lawyer Sandra Bonfiglio, P.A. at 954-945-7591 today.