If you own a family business, you may wonder what will happen to it in the event of a divorce. Well, it depends. Various factors could determine the fate of the family business, such as when it was acquired, its nature and its value.
First, it helps to understand whether the business is marital or separate property. If the business was started or acquired during the marriage, it is likely considered marital property and subject to division. However, if one spouse owned the business before the marriage, it may be classified as separate property, but any increase in value during the marriage could be subject to division.
Remember, Florida is an equitable distribution state. As such, the court will consider various factors when deciding how to divide the business (in the event of a litigated, not negotiated, divorce), all aimed at achieving fairness rather than an equal split. They include the contribution of each spouse to the business, the economic circumstances of each spouse and the desirability of keeping the business intact and operational.
What are the available options?
There are several ways that spouses may negotiate or litigate a resolution to family business concerns during divorce. One option is for one spouse to buy out the other’s interest in the business. This can be done through a lump sum payment or over time through a structured settlement. Spouses could also divide their assets in such a way that, for example, one spouse gets the business and the other gets the house. Another option is for both spouses to continue co-owning the business post-divorce.
In some cases, spouses may negotiate or a court may order the sale of the business and divide the proceeds between the spouses equitably. However, each case is unique, and the outcome largely depends on the specific circumstances of the situation.
Reaching out for legal guidance early in the divorce process, especially when there is so much at stake, can help protect your financial interests and ensure you get what you deserve.
