Operating the Family Business After Divorce
Going through a divorce raises a host of issues that couples must deal with before their marriage can officially be dissolved. These issues range from how assets will be divided and how parental responsibilities will be shared to who will retain the family home and whether one party will receive spousal support. Juggling these issues becomes even more difficult for couples who also own a family business, so if you are going through a divorce and disagree about what should happen to the business you started together, you should contact an experienced divorce attorney who can help you reach a decision that is best for you and your family.
Dividing Marital Property
In Texas, only marital property is subject to divorce, so one of the first things that a couple must determine when dissolving their marriage is whether the business qualifies as marital property. In most cases, anything acquired during a marriage is considered marital property, so if a couple started a business after they were already married, the company would need to be equitably divided. Businesses started prior to a marriage, on the other hand, may not qualify as marital property, although if any contribution of marital funds enhanced the value of the company, at least a portion of the business will constitute marital property. In these cases, couples will need to grapple with what percentage of the company each spouse should receive, which usually hinges on a number of factors, such as each party’s contribution to the company.
Selling the Business
Although it is possible for couples who own family businesses to keep working together after divorce, it can be difficult, so it is much more likely that one spouse will buy out the other’s share of the company or that both parties will sell the company to a third party and distribute the proceeds equitably. Receiving a fair and accurate valuation as to a business’s value is critical in either case, so the parties will need to retain an expert who is familiar with the industry and type of business in question. Although it is preferable for both parties to agree on hiring a single expert, some couples choose to obtain separate valuations.
As part of the valuation process, the expert will take into account a variety of factors, although one of the most important is enterprise goodwill, which is defined as the likelihood that a client would recommend the business. Like any other type of marital asset, the value of a company’s enterprise goodwill is also subject to division. Finally, divorcing parties have the option of negotiating, in such a way that one spouse receives all of the other spouse’s interest in the business, but must give up other marital assets, including vehicles, personal property, or even the contents of a bank account.
Contact an Experienced Florida Divorce Lawyer
To discuss your own divorce-related questions or concerns with a compassionate and dedicated Fort Lauderdale divorce attorney, please contact Sandra Bonfiglio, P.A. by calling 954-945-7591 or by sending us an online message today. We are prepared to help you throughout each step of your case.