Division of Business Assets in Divorces
Protecting family companies after separation
The presence of a family business can further complicate what is already one of the most difficult aspects of a typical divorce. Our attorneys at Miller Upshaw Family Law, PLLC have seen it all concerning complex property division issues and have litigated or otherwise resolved disputes involving division of business assets throughout Middle Tennessee. These disputes sometimes require creative solutions, and we are always quick to think outside the box when proposing resolutions during negotiation or in court that protect your interests while still equitably dividing the marital assets.
Is a family business marital property?
Determining what, if any, portion of a family business is subject to division of marital assets and the monetary value of that portion can require extensive research and consultation with financial and economic experts. This is especially true if the business predates the marriage. The same rules regarding the distinction between separate and marital estates that apply to other types of property also apply to the division of business assets. However in this context, there are a couple of considerations often particularly important:
- When was the business started? — Property acquired prior to a marriage is often considered separate property not subject to distribution. This can hold true for businesses, unless the spouses treated it as joint property or unless the value of the business increased because of contributions made by the other spouse during the marriage.
- How was the business acquired? — Many family businesses are passed down through generations. Inheritance is usually exempt from equitable distribution. Even in these cases, however; if the other spouse actively contributed to the business during the marriage, any increase in value may be subject to equitable division.
- How have the spouses contributed to the business during the marriage? — Even when a business predates a marriage or was acquired as a gift or inheritance, some or all of it may be subject to equitable distribution if the other spouse substantially contributed to its preservation and appreciation during the marriage.
How business assets affect equitable distribution
Dividing a family business down the middle is often not an option. If the parties want to keep the business whole, a complex asset distribution plan is often necessary. This could include giving the entire business to one spouse while giving the other an additional portion of the rest of the marital estate to make up for the value, selling the whole company to a third party and dividing the proceeds or transferring the business to a third party and reserving income interests for each spouse. Our Nashville divorce attorneys along with a qualified team of tax and financial professional can help you evaluate the tax and business consequences of these and other courses of action.
Call us for creative solutions to complex property distribution issues
Having practiced law for decades, our attorneys at Miller Upshaw Family Law, PLLC have seen just about every asset distribution dilemma you can imagine. On Woodland Street in historic Edgefield, our Nashville office is within sight of the courthouse and offers free parking. Call us today at 615-391-4200 or contact us online to schedule a consultation with an experienced attorney.