MIAMI, Florida. If you are getting divorced and you and your former spouse own or run a business together, your business might be one of the most challenging assets to divide during your divorce. According to Inc., your ex might be entitled to 50% of your business if you get divorced. While it is true that some former couples can put aside their marriage and focus on business, many couples will want a clean split. So, how can you make this happen if both you and your ex ran a business together?
Depending on how your business is classified or owned, it might be considered either a shared asset or separate property. Even if you owned your business on your own before you got married, the business assets or income could be considered shared property, because income acquired during the marriage is considered shared. Any assets that gained value during your marriage could also be impacted, even if the assets might have originally been separately owned. For example, if you owned a home yourself before the marriage and the home value increased during your marriage, the increase in value could be considered marital property. The same could hold true for a company’s value.
Florida is an equitable distribution state, meaning that property doesn’t need to be split 50-50, but it must be split in a manner that the court deems fair.
So, what can you do to protect your company? If you have a prenuptial agreement in place that specifies that the company is yours, then you may be able to keep the company yourself. However, what happens if you don’t have a prenuptial agreement in place? If your business is an LLC, partnership, or corporation with shareholder agreements in place, the company might be protected. According to Inc., you may be able to protect your company by paying yourself a competitive salary. By doing this, the courts may be able to look at your salary and your business as two separate entities.
Yet, many of these provisions must be in place when the marriage starts. What can you do if you don’t have any of these provisions and still don’t want to run your business with your ex? Your option might be to use other assets, like property, retirement funds, or money to pay him or her off for his or her part of the business. Another option is to sell the business and split the proceeds. Of course, determining your business value or selling your business may require the assistance of professionals.
When divorcing, it also helps to have a divorce lawyer on your side to help you navigate the process of dividing your assets. According to Entrepreneur, when couples can set aside the emotional side of their divorce and focus on the financial side as a separate piece, then the outcomes can often be more positive. However, this can be very hard to do alone. Hire a qualified divorce lawyer like Sandy B. Becher, P.A. in Miami, Florida. Having qualified professionals on your side to help you get through this is essential. This includes counselors, financial planners, mediators, and divorce lawyers. There are many different ways to deal with your business during a divorce. Some couples even choose to keep the business in both parties’ hands and find ways to work together to help their companies grow. Whatever choice you make, speak to a lawyer like Sandy B. Becher, P.A. in Miami, Florida first, to understand your rights and options under the law.
Sandy B. Becher, P.A.
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Miami, FL 33131