Divorce is always stressful, as it can mean many life changes. However, divorce can be especially stressful when there are business interests on the line. Owning their own business has become more and more popular for married couples, either due to the fewer job prospects in today’s economy, the flexibility that online businesses can now offer, or simply because they want to work for the good of their family and not for a corporation. However, owning a business can be complicated if two married owners decide to get a divorce.
What will happen to a business in a divorce depends on many different factors, including whether one spouse owned the business first and whether one or both spouses want to continue with the business after the divorce.
If You Owned the Business Prior to Marriage: If you came into your marriage with an established business, Florida would consider the business interests at the time of the wedding to be non-marital property and you would get to keep that. However, if the business increased in value during the marriage, your spouse will be entitled to division of the additional value. The same goes if your spouse came into the marriage with a pre-existing business.
You Started the Business Together: Any business you started during the marriage will be considered marital property and will be subject to equitable division under Florida law. This does not always mean that the business must literally be split in two, however, and the following are some arrangements that may be beneficial:
- You and your spouse get along well enough to continue to be business partners despite the divorce, so you agree to continue to each own half the business;
- Your or your spouse decides to sell their portion of the business to the other so that they can continue operations (this can be challenging if both spouses wish to continue);
- You both liquidate the business and split the proceeds, then having the ability to use your proceeds to start a new business venture;
Most commonly, one spouse opts to give up his or her interests in the business. However, a spouse will not always have the liquid assets to buy out the other’s business rights. In such cases, mediation or negotiation can lead to a different equitable arrangement, such as one spouse gets the business and the other gets the house. If a divorce is contentious and no agreement is reached, what happens to your business will be at the discretion of the court.
Contact an Experienced Attorney
While it is true that divorce can completely change many different aspects of your life, it does not have to completely end life as you know it. There are many different options to keep running a business after divorce and an experienced Boca Raton divorce attorney can assist you in exploring every possible option you have to achieve your desired goals after a divorce. Family law lawyer Alan R. Burton has decades of experience helping divorcing couples in Florida, so please call today at 954-229-1660 to find out more information about how we can help you.