For many Americans, a small business provides their sole source of income. Whether you work as an independent accountant, a freelance writer, a restaurant or store owner, or a skilled crafts person, you are operating a small business for a living. This means that if you get divorced, your small business is considered to be a marital asset and subject to division by the court.
In Florida, marital assets are divided according to the principle of equitable distribution. This means that instead of splitting an asset’s value in half for a divorcing couple, each couple receives a portion of the marital estate that matches his or her contributions to it and financial and personal needs following the divorce. This, as well as your plans for your business after your divorce, is used to determine how your business may be divided between you and your spouse.
Consider a Prenuptial Agreement
A prenuptial agreement is a document that details how a couple’s assets will be divided in the event of a divorce. It can also include instructions for distributing an individual’s assets upon his or her death. This type of document is signed by a couple before they are married. For a business owner, a prenuptial agreement is a very important document.
You can use a prenuptial agreement to prevent your spouse from laying any claim to your business in the event of a divorce, essentially marking it as singly-held property rather than marital property. But your spouse could potentially challenge this during a divorce, stating that he or she contributed to its success or should otherwise be entitled to a portion of it in a divorce. Work with your attorney to cover all possible issues that can arise with a prenuptial agreement.
If you and your Spouse Own a Business Together
Many business owners work closely with their spouses to operate their companies. When your business belongs to you both, dividing it in a divorce can be more complicated than if you operated it by yourself.
Your business will need to be valued to determine an appropriate market price for it. Factors like its profits, its debts, depreciation, and its projected growth can be used by an independent appraiser to determine an appropriate figure. You and your spouse will also have to determine your plan for the business after your divorce. If one of you plans to buy out the other’s interest in the company, the appraised dollar figure will be used to determine an appropriate price. If you choose to sell the company, the profit will be divided according to Florida’s equitable distribution law.
Remember, getting a divorce does not mean you both have to leave the company. If your relationship is amicable following the divorce, continuing to work in the business together could be a viable option.
Work with an Orlando Divorce Attorney
For guidance as a small business owner working through the divorce process, contact Sperling Ducker to schedule your free legal consultation. Mr. Ducker is an experienced divorce attorney who can address your unique needs as a business owner and the challenges you could face. Call 407-645-3297 to schedule your legal consultation today.