Ending Your Marital and Business Relations
Typically, in Florida, when parties get divorced all marital assets and liabilities are equally divided. The definition of a martial asset and marital liability is either property or debt acquired between the date of marriage and the petitioner’s date of filing for divorce. However, it is important to inform your family law attorney of any prenuptial agreements, postnuptial agreements, or other contracts that exist between you and your spouse because such contracts will most likely dictate what assets you are entitled to in a divorce. Therefore, any business started by either spouse during the marriage is considered a marital asset and/or liability. Unlike other marital assets, such as a martial home, a business is more difficult to equally divide as many factors are considered in order to assess the value of a business.
How a Business Is Valued
Florida courts value a business based on its fair market value on the date that the couple separated. To come up with a valuation, appraisers consider:
- Accounts receivable
- Bank accounts
- Business reputation
- Customer lists
- Real estate
- Stock of materials and product
The combination of these factors gives a reasonable estimate of what the business would be worth if it were to be bought by another party at the given point in time.
Business Started Prior to the Marriage
While a business started by one spouse prior to a marriage is a non-marital asset that does not mean that it is completely exempt from equitable distribution. Any enhanced value of the business that occurred between the date of marriage and the petitioner’s date of filing for divorce is considered a marital asset. This is not an easy task to prove but one that is a worthwhile effort to ensure that you receive all assets you are entitled to pursuant to Florida law.
How Is it Divided?
The marital business can be divided one of two ways, by agreement between the parties or a Judge will decide at trial the most equitable means of division. Florida courts will typically award the business to the spouse who was more heavily involved with the operations. Still, the other partner will not be left empty handed. Rather, the spouse who keeps the business will usually buy out their spouse based on the official appraisal.Contact Beaulieu-Fawcett | Newell Law Group, P.A. for dedicated assistance with your divorce.