Divorce for Business Owners
Determining the distribution of marital property and assets can be a significant issue in divorce proceedings. Business owners and professionals that own their practices, such as doctors and lawyers, their spouses, and couples who jointly own a business will have additional considerations to address in their divorces. At the Law Offices of Stephen J. Press, our experienced West Palm Beach divorce lawyers understand the complexities of valuation, division, and other issues that arise in divorce cases involving companies or professional practices owned by one or both spouses.Divorce for Business Owners in Florida
If business ownership is a factor in a Florida divorce case, the first step is to classify it as separate or marital property. Marital property generally consists of property and assets acquired during the marriage, by either spouse. Marital property is subject to an equitable division between the spouses in the event of a divorce. Separate property includes the property, assets, and business ownership interests of a spouse prior to marriage. Each spouse usually retains their own separate property after a divorce, but there are circumstances where separate property may become marital property. For example, if the value of a business or professional practice increased during the marriage as a result of marital funds, labor, or contributions from the non-owner spouse, that value may qualify as marital property. As such, a business that would otherwise be separate property may be classified as marital property if business assets were purchased with marital funds, or if the owner transferred an interest in the business to his or her spouse. It is also important to note that if the spouses entered into a prenuptial or premarital agreement before their marriage, the agreement must be reviewed for provisions that affect the division of the business assets.Business Valuation in a Florida Divorce
A business or professional practice that is considered marital property must be valued in order to divide it equitably in a divorce involving business owners. In many divorce cases, a business that is classified as separate property will also be valued, in order to make the distribution of marital property between the spouses fair and equitable. In Florida, the value of a business in a divorce case is its fair market value as of the date the spouses separated. The fair market value includes the value of the net assets of the business, such as inventory, equipment, accounts receivable, cash, and real estate, plus the value of the business’s enterprise goodwill. Goodwill is a more subjective value, as it is a nontangible concept referring to things like the quality and consistency of customer relationships, branding, and employee retention. For purposes of a divorce, goodwill does not include the value of the reputation of the owner of the professional practice or business, which is considered separate property. If the spouses cannot agree upon the fair market value of the business, each spouse may present evidence in support of their position. Typically, the evidence will include independent appraisals by the expert business valuators retained by each party.
Once the company valuation is determined in a divorce for business owners, the portion considered marital property will be equitably distributed between the spouses. There may be several options for division available, depending on the circumstances of the specific divorce case. The spouses may negotiate a buy out of one spouse’s share of the business, the sale of the business and division of proceeds, or agree to other terms to settle their divorce. Your divorce attorney can protect your interests during the proceedings, negotiate on your behalf, and help you make an informed decision.Retain a Skilled Divorce Lawyer for Business Owners in West Palm Beach
West Palm Beach attorneys Stephen J. Press and Jessica Mishali have the knowledge and resources to guide you through a divorce case involving a business or professional practice. He can assist people at all stages of the divorce process in Fort Lauderdale, Boynton Beach, Delray Beach, Jupiter, Royal Palm Beach, Boca Raton, Hallandale Beach, Wellington, Pembroke Pines, Davie, Coral Springs, Hollywood, Pompano Beach, Plantation, Stuart, Hobe Sound, Indiantown, Palm City, and Jensen Beach, in addition to other areas of Broward, Palm Beach, and Martin Counties. Request your free consultation with a business divorce attorney by calling (561) 833-2772 or contacting us online.