When business owners decide to get divorced, many questions will arise about how the business will be valued and how the assets will be distributed. Whether it is a family business or a company that you started before you got married, the first and most important step is to get a fair and accurate valuation of the business and other related assets.
The following are a few questions that might come to mind when you have business assets, and you are planning to divorce:
Q: How do we determine what is marital property?
In Tennessee, judges divide marital assets using the legal principle of equitable distribution, which is not exactly a split everything down the middle approach, but instead tries to make sure that assets are divided fairly.
A business which provides income for both parties is considered a marital asset, especially if it is one that the parties started and built together. Even if the company was created before the marriage, it can still be considered marital property if both parties managed it, or if they relied on the proceeds from that business to furnish their lifestyle. Another factor to consider is that while separate property is not subject to division, the increase in value of the business during the marriage may be subject to division in the divorce.
Q: What considerations are included in business asset division?
Some of the considerations in more complex divorce negotiations include factors such as:
- How long the business has been in operation
- The date of your marriage
- Who contributed startup funding
- The value of the business when one party filed for divorce
- How a professional partnership is valued
- Foreign business ventures and assets
- Evaluation of debt distribution
Q: What are some available options for the disposition of the business in divorce?
If it turns out that the business is a combination of separate and marital property, and neither of you wants to sell it or buy the other one out, you can continue to run the business together as partners. This would only work in divorces where the two parties can get along well enough to work together. Another option is to sell off the business and divide the proceeds between you. Finally, one spouse can choose to sell his or her portion of the business to the other spouse.
Your Nashville divorce attorney from Miller Upshaw Family Law, PLLC will work with forensic accountants, experts in business valuation, and other subject matter experts to unravel complex business and financial matters, so that decisions can be made about how they will be distributed.
At Miller Upshaw Family Law, PLLC, our focus is on you. Our experienced team of Nashville family law attorneys are here to help you sort out issues such as business asset division and other complex divorce challenges. You may call us at 615-454-9899 or contact us to reserve a consultation with an experienced attorney right away.