Sarasota Divorce – Business Assets, Business Valuation, And Valuation Methods
If you are going through a divorce, you may be concerned about what will be considered marital property and how it will be divided between you and your spouse. The law in Florida about which assets will be considered marital property can be confusing, and figuring out how they will be divvied up in a divorce can be even more puzzling. This is especially true when dealing with business assets, business valuation, and valuation methods. Thankfully the Sarasota divorce lawyers at Law Offices Of Matthew Z.
Martell, P.A. have handled all kinds of divorces and know how the law treats business assets and property division when going through a divorce. Whether you are trying to protect your property or seeking a fair divorce settlement, we will handle your case with integrity, accountability, and compassion. For a consultation, reach out to us today by calling (941) 556-7020 or by contacting us online.
Property And Asset Division
In Florida, essentially anything of value can be considered marital property. The law says that marital property is anything that was acquired during the marriage. This means that if you bought a home during your marriage, started a business, or contributed to a retirement plan, then they all may be considered marital property and subject to division upon divorce. Property acquired before the marriage is generally considered separate property and may not be split up upon divorce. This means that all the property you owned before you got married will remain yours when you divorce. Still, there are exceptions to these general rules that may apply to your specific case. For example, a valid pre-nuptial agreement can exclude property from the division that ordinarily would have been considered marital property.
If there is no agreement between spouses, the court will decide how marital property will be divided upon divorce. The court will look at several factors to determine how the marital estate should be split up. The factors are designed to allow the court to come to an equitable decision. What this means is that property or asset division upon divorce may not always be 50/50 but instead will be done in a way that the court determines is fair and equitable based on the parties’ specific circumstances.
Business Assets, Business Valuation, And Valuation Methods
Under Florida law, businesses and business interests are considered assets for purposes of property division. It is important to understand that you do not need to own a business outright for it to be considered an asset. Partial ownership or co-ownership in a business interest can also be considered marital property. Indeed, many high-value divorces involve business assets that are at the center of property division litigation. Some examples of businesses that may be considered marital property are:
- Professional Practices
- Professional Partnerships
- Corporations
- For-Profit Businesses
- Sole Proprietorships
A business asset may be considered marital property if:
- A spouse contributed either financially or supplied labor in the running of the business
- The value of the business increased during the marriage
- The business was purchased or formed during the marriage
- Marital funds were used to improve or run the business
- The business was acquired with commingled funds
Business Valuation And Valuation Methods
If a business asset is considered marital property, then the next step will be determining how much the business is currently worth. This is typically done by employing one of the accepted valuation methods. Business valuation considers several factors, including bank accounts, inventory, real estate, equipment, account receivables, machinery, and customer lists, among other items. There are a few methods used to determine the value of a business.
Market Valuation Approach
This method looks at the current market to determine how much a willing buyer would pay for the business on the open market. This approach uses comparative data to come up with the value of the business. In many cases, similar comparable businesses recently sold will be used to determine how much the business could sell for if placed on the open market.
Income Approach
By looking at the current and potential future income the business generates, a value is determined using a formula. This method is used to ascertain the value of many professional practices.
Cost Approach
In the simplest terms, this approach looks at the assets of the business minus its liabilities to determine value. Both tangible and intangible assets can be considered when looking at what the business is worth.
Alternative Decision-Making Methods
If there is no agreement on how the business is to be divided, then there are a few options on how a decision can be reached. Mediation is a non-adversarial dispute resolution method designed to give spouses control over the entire process. This means that the spouses can select whom they want to mediate with and the issues that will be brought to the table. The mediator is a neutral party whose role is to support and encourage the parties to reach an agreement. While the mediator may make recommendations, they do not have the power to decide on their own. Mediation is typically appropriate for spouses that are civil, amicable, and motivated to come to a resolution. For spouses that are far apart on the issues, litigation may be the only option to determine how marital property and assets will be divided.
Sarasota Divorce Lawyers
In many divorces, property division is a contentious issue. Spouses can feel entitled to a business they worked hard to create and will fight hard to hold on to it. Similarly, a spouse that feels entitled to a share of a business they co-owned or supported can feel equally deserving of a share of that business. At Law Offices of Matthew Z. Martell, P.A., we know how important business assets are to spouses, and we fight hard for our clients so that they receive the best possible outcome in their divorce. 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.