If you own a business and divorce is in your future, now is a time when you need to how your business will be treated under Florida's equitable property distribution laws. Even if you owned the business before your marriage, a portion of it may be considered marital property.
Unless you have a prenuptial agreement, any business you start after your marriage date is marital property. It doesn't matter if the other spouse is not named as an owner of the business or was not involved in the business. Florida law still considers the business to be marital property. The non-owner spouse is entitled to an equitable share, which is typically 50 percent.
If you owned a business before your marriage, a portion of it may be considered marital property. For example:
- If the business increased in value, the increase in value may be considered marital property and be subject to division
- If the spouse of the business owner contributed time or resources to the business, that contribution may entitle the spouse to a portion of the business.
Financial records are extremely important to obtain a fair valuation of the business. The time to collect those financial records is now. Attorneys typically use business valuation experts to determine how much a business is worth. Not all businesses have value. For example, a one-person service business may not have value beyond the owner's good will. One test of whether a business has value is whether it can be sold.
Once a business is valued, dividing it can be complex. Simply selling the business and dividing the proceeds may end up hurting both sides. A business can provide a needed source of income. If the divorce is amicable, both spouses may choose to operate the business together. Other options may include swapping one asset (such as interest in a business) for another (a house).
To protect your interest in a business, it's important to seek prompt legal advice. Nix Law, P.A. in Orlando is handles complex divorce issues such as division of a business or professional practice.