Business Assets In A Sarasota Divorce
When most people think of assets, things that come to mind are houses and real estate, cars, financial accounts, and stocks and bonds. But in the state of Florida, businesses can be considered assets as well, especially in a divorce. Depending on the circumstances, a business may be considered marital property and subject to division upon divorce. If you or your spouse owned a business during your marriage, it might be divvied up in the divorce settlement.
Not all businesses will be considered marital property, and the law will look at various factors to determine if the business is a part of the marital estate and subject to division upon divorce. The Sarasota family lawyers at Law Offices Of Matthew Z. Martell, P.A. have handled several divorces involving business assets and know how the law treats them. Whether you are looking to protect your business or are seeking an equitable distribution of a business, we are here to help. If you are going through a divorce, we will fight hard to ensure that you receive a fair and favorable divorce settlement. For a consultation, reach out to us today by calling (941) 556-7020 or by contacting us online.
What Is A Business Asset?
A business asset in a divorce is any income-producing business or corporation. This does not include a typical nine-to-five job or part-time employment. Some examples of business assets would be an accounting firm, a restaurant, or a hardware store. You do not need to own the business outright for it to be considered a business asset. Partial ownership in a business may qualify as a business asset for divorce property distribution. It is also important to understand that a business does not need to be financially profitable to be considered a business asset. While profitability may come into play when determining the value of the business, a business that is struggling financially or that is not currently producing income may still be considered a business asset in a divorce.
How Business Assets Are Handled In A Divorce
The law in Florida considers anything of value as marital property for the purpose of valuation and division of the marital estate. This means that a business may be considered marital property and, therefore, subject to division upon divorce. In determining if the business is marital property or separate property, the court will look at a few factors. Some of those factors are:
- When was the business created?
- Was the business included in a valid pre-nuptial agreement?
- Who owns the business?
- Were marital funds used to purchase the business?
- Were proceeds from the business commingled with other marital property?
Generally speaking, if the business was created and operated during the course of the marriage, then it will likely be considered marital property. Similarly, if both spouses co-owned the business, it will also likely be considered a part of the marital estate. A business created before the marriage occurred or that is excluded from marital property by a valid pre-nuptial agreement may be considered separate property and, therefore, not subject to division upon divorce. If a business is considered marital property and subject to division, the court will divide the business asset equitably. This does not necessarily mean 50/50, but instead, the business will be divided in a way that the court deems fair under the circumstances.
Business Asset Valuation
Before a business asset can be divided, it must first be valuated. Business valuation can be done in several ways, with each valuation method having its pros and cons. There are a few common business valuation methods.
Net Book Value
This valuation method looks at the business’s assets minus its liabilities to determine how much the business is worth. This method does not take into account some non-tangible aspects of the business, nor does it consider the potential of the business’s profitability if it were operated at maximum efficiency.
This valuation method determines a business’s value by looking at how much a willing buyer would pay for the business in its current state. This method is also known as the fair market value of the business.
Some businesses will not neatly fit into a valuation method typically used to determine the value of a business. In these instances, the court may look to other valuation methods or require a forensic accountant to go over the financial documents of the business to come to a more precise valuation. Business asset valuation can be a major point of contention in a divorce if there is no agreement among the spouses.
Dividing Business Assets
If the court determines that a business asset is marital property, then the business may need to be split up between the parties in the divorce. If there is no agreement, then the court may require that the business be sold or that one spouse buys out the business from the other spouse. In some cases, it is even possible for the spouses to continue to co-own and operate the company together after the divorce. This option is generally not recommended as ex-spouses typically will have a difficult time successfully remaining business partners after a divorce, and Florida judges will likely not force a couple to continue to co-own and operate a business together.
Sarasota Divorce Attorneys
For many high-value divorces, business assets are part of the marital estate. Whether it’s a professional practice or a mom-and-pop store, business assets are routinely fought over in divorce proceedings. At Law Offices Of Matthew Z. Martell, P.A., we know how important these assets are to our clients, and we will aggressively pursue the fair and equitable distribution of all marital property. Let us help you ensure that you receive everything you are entitled to in your divorce settlement. For a consultation, reach out to us today by calling (941) 556-7020 or by contacting us online. We look forward to hearing from you.