Dividing up personal assets in a divorce can be challenging enough. When a couple owns a business together or when one or both spouses owns their own business, the complications can be multiplied. However, family law attorneys work with these situations all the time. There's no reason to stay in an unhappy marriage because you dread dividing the business.
As with personal assets, if the business was acquired or started after a couple was married, it is considered a marital asset whether it is in both of the spouse's names or just one. In states like North Dakota and Minnesota, which are both equitable distribution states, a business that was started during the marriage will be divided equitably, or fairly, but not necessarily 50/50.
Generally, divorcing couples who own a business together can do one of three things with it. They can sell it and split the proceeds. They can continue to own it together, assuming that they get along better as business partners than as marital ones. One spouse can buy out the other one's interest in the business.
If a business was started before the marriage, determining each person's share in a divorce is more complicated. A professional valuator will need to determine the difference between the value on the day the divorce papers were filed and the value on the marriage date. In some cases, spouses can argue that their efforts led to an appreciation in the business's value even if they were not co-owners.
Determining the value o/f a business is a complicated procedure that needs to be done by professionals. However, it is necessary for just about every scenario that we've discussed here. It's essential for family law attorneys to be in the loop with what the valuators are doing to help protect their clients' interests and help ensure that they get their fair share of what is likely a significant asset.
Source: Fox Business, "Could You Lose Your Business in a Divorce?," Rebecca Zung, Credit.com, Aug. 07, 2015