DIVORCE | ADOPTION | ELDER LAW
Your Family Law Firm
Tips To Protect Your Florida Business in a Divorce
Businesses are often intertwined with divorce litigation. As a Florida business owner, you likely worked hard over a long time to build your business. The idea of losing it due to a divorce is deeply unsettling, and you probably want to do everything you can to keep the business once the divorce is final. Aside from your commitment and effort to building the business, you will likely count on the business to provide financial support after the divorce. Various factors should be considered when obtaining a Florida divorce as a business owner to protect your business interests.
General Principles of Equitable Distribution in Florida
Florida Statute § 61.075 sets out the legal standard for the division of marital assets, including business interests. Under this law, marital property in a divorce is distributed fairly, although not necessarily equally. Assets acquired before the marriage or subject to a valid nuptial agreement excluding the asset from consideration as a marital asset will not be divided by the court. In any event, if the business was begun during the marriage, it will likely be considered a marital asset. And even if the business was formed before the marriage, the appreciated value of the business during the marriage can also be a marital asset.
Maintaining Control of Your Business
Assuming the business is considered a marital asset, a judge will usually divide it in one of two ways. These include:
- Valuing the business and buying your spouse out of their half
- Selling the business and dividing the proceeds in a fair manner
If both parties operated the business before the divorce being filed, a third option could be for the parties to operate the business together following the divorce. However, but this is usually not practical due to the underlying reasons for the divorce.
Valuing the Business
If you keep the business, the court will first need to know the business’s equity value to determine the amount to award your spouse. Typically, this will require the services of an accountant or other qualified person to value the business. This can be more or less difficult given the nature and complexity of the business, assets, and liabilities of the business, and goodwill of the business. If you want to keep the business, a lower valuation will benefit you in the equitable distribution. Conversely, if you are a spouse whose interest is being bought out (you are transferring your interest in the business to your spouse in the divorce), then you will benefit from a higher valuation because your buyout will be higher.
Once the value is determined, you can buy your spouse’s marital interest in one of several ways and keep the business. One option is to give up your interest in other marital assets to “buy” your spouse’s interest in the business. For instance, you may be able to disclaim your equity interest in real property, like the marital residence, and marital investments. Alternatively, if there are marital liabilities, it is possible that you could accept a larger share of those liabilities to offset your spouse’s interest in the business. If none of these options are viable, you may need to obtain financing to buy your spouse’s interest in the business. Whatever the method, keep in mind that both parties are generally entitled to receive their equal share of marital assets.
We Can Help You Keep Your Business
At The Wheeler Firm, we can assess your case, outline your options, and and give you the best chance of keeping your business in a Florida divorce case. Call us today at (850) 273-6930 or contact us online to schedule a consultation with one of our attorneys.
WHY CHOOSE US?
Led by experienced family law attorney, Andrew D. Wheeler, The Wheeler Firm is committed to the protection and security of every client. We work to ease the stress of family law litigation, protect our client’s interests, and focus on proven results. With more than 15 years of experience litigating every form of family law case, and representing thousands of individuals and their families, we promise exceptional representation and advocacy. Call us at (850) 613-6923 for a consultation.
