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Dividing a Marital Business in a Divorce

divide a business in divorce

It is fairly common knowledge among divorce attorneys in Orlando Florida that any asset that is accumulated during a marriage is subject to equitable distribution if and when the parties decide to seek a divorce.

What is not as easily understood is how to treat a business that was opened by one of the parties during the marriage.

This article will explore some of the basic principles behind the equitable distribution of a marital business in a dissolution of marriage case.

Just like other property such as a house, car, household furnishings, retirement account, and other types of property a business that is opened during a marriage is going to be treated as a marital asset that needs to be divided in the divorce.

However, when Orlando divorce attorneys are tasked with the chore of dividing a business the process is much more complex and difficult than figuring out what to do with a car or a home.

This is because a business cannot just be sold, and the prophets divided. This is because in most cases the business will be a long-term source of income for one of the parties after the divorce and will likely be a source of alimony or child support for the other party after the divorce. Therefore, liquidating the business and dividing the proceeds is not an option in most cases.

The analysis that a good divorce lawyer will take when they are hired to represent a party in a case involving a divorce with a business is to confirm that the business is, in fact, a marital asset, explain to the client the probable need to retain a professional business valuation expert, submit formal discovery request for business-related discovery such as corporate tax returns, corporate bank statements, and others, and consider whether or not it is necessary to add the corporation as a party to the case.

The parties to the case will need to be able to agree as to the value of the business. Once this is done it is easy to ascertain what each person’s marital portion of that value is. Typically, the business cannot be sold in order to compensate the other spouse for their share of the business value and it is very common for a separate equitable distribution payment schedule to be set up in order to compensate the other spouse for their portion of the business value over time.

Another way in which a spouse can receive compensation for their marital portion of a business’s value is through additional spousal support agreed to between the parties. In Florida divorces, this is often a more preferred route since alimony has a more streamlined path to enforcement than do equitable distribution payments.

In many cases, businesses are opened by one party before the date of marriage and during the marriage, the value of the business increases dramatically.

In these cases, it is true that the business itself is not a marital asset that would be subject to Florida divorce property division. However, the increase in the value of the business during a marriage is a marital asset that is subject to division in the divorce so long as marital efforts and marital funds were used to assist in the increase in the value of the business.

Divorce litigation is very complex and difficult when it involves a marital business. It is far more complex when the litigation must go all the way to a contested trial. For that reason, it is highly recommended that anyone going through a divorce that involves a marital business work as hard as possible o obtain an amicable settlement to their case.

This can be achieved by seeking out reasonable divorce attorneys in Orlando Florida who have a reputation for working hard to settle cases. If you are not careful, you may end up hiring a lawyer for your divorce who only wants to stir up conflict in order to generate additional fees. This type of approach is bad for everybody and is frowned upon by the judges.


A Seven-Step Analysis of Equitable Distribution in Florida Part 1: Classification and Valuation of Marital Property


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