Recently on this blog we discussed how marital homes can be dealt with during the divorce process. Dividing assets like the marital home can be challenging given the value and the emotions attached to them. Yet, an individual cannot let sadness or anger blur their vision when it comes to property division. If they do, then they may wind up on the losing end of an agreement, which can set them on poor financial footing when they start their post-divorce life.
Those who are dealing with a business during property division may want to be especially diligent in their efforts to achieve fairness, whatever that may look like under the circumstances at hand. The first step in handling a business in divorce is to consider whether it should be subjected to property division at all. If the business was started or acquired prior to a marriage with an individual’s own funds, then it may be considered separate property that is exempted from divorce proceedings.
If a business is deemed marital property, though, then an individual needs to secure an accurate valuation of the property. This step is key because the value given to the business will dictate any buyout amount that the other spouse may pay or how other marital assets will be divided to offset one spouse keeping the business. With so much at stake here, oftentimes each spouse decides to secure their own valuation so that productive negotiations can occur.
Similar to a marital home, there are three ways a business can be dealt with in divorce. First, one spouse can buyout the other spouse. Second, the parties can remain co-owners. Third, the business can be sold and the proceeds divided in a fair manner. The right path will depend upon the parties’ relationship and their financial goals moving forward.
With so much at stake, though, it is wise to have a strong legal advocate by one’s side prior to engaging in negotiations regarding property division. A skilled legal advocate can fight for a fair outcome that sets the course for financial stability post-divorce.