Businesses & Divorce
No matter what the circumstances might be, and no matter how bad you might want to be out of a marriage, divorce is a difficult situation. However, while things like kids, and family definitely make things difficult, but what can make it even more complicated is a business asset. When a divorce happens, without the presence of a specific prenuptial agreement, the assets that you and your spouse acquire together must be divided fairly evenly and when a family business is involved, things can get even more complicated. Considered the best family lawyer Miami has to offer, Mr. Steven Veinger, Esq. has helped countless individuals follow through with their divorces, and in many instances some form of a family business has been involved. To help you better understand how exactly assets and business assets are divided during a divorce proceeding, here is some important information to know.
Marital Property Vs. Individual Property
Depending on the ownership situation involved with a family business, and in the instance where the two former spouses can’t come to an agreement to divide assets, then the courts will have to decide. With a business entity they must decide if it is to be considered as a marital asset or an individual asset, in order to do so a number of factors will be taken into account. According to Mr. Veinger, the best family lawyer Miami has in practice, some of these factors include – the date the business was establishes, the nature of the businesses funding, and what each spouse contributed to the businesses (in all facets, financially and more). In addition, the valuation of the business, both before and after the marriage.
Individual Property Becoming Marital Property
Even when a business was owned by one individual prior to the marriage, it can still be considered marital property. Again, considering those factors above, the contributions of each party, and how the business funds were integrated into the funds of the marriage. According to Mr. Veinger, the best family lawyer Miami has to offer, when the non-owning spouse had to quit her job in order to assist in the operations of the business, this will also be factored into things. This process of turning individual property into marital property is known as transmutation.
Gifts & An Inheritance
In many instances, according to the best family lawyer Miami has in practice, Steven Veinger, a business can also be given from one spouse to another as a gift or as part of an inheritance – and thus not designated as marital property. Again, if there is a prenup in place, it can also protect an individual from having their business be considered a piece of marital property.
The fact is that depending on how the divorce negotiations go, there are a variety of different outcomes that can occur – especially once the company or business entity has been valuated. Some of these outcomes that may occur when a resolution could not be made, include:
· Buyouts – One spouse offers the other, a monetary number to buy out their share of the business. Usually half of the total valuation of the company or whatever the two sides agree to.
· Co-Ownership – If the two sides think they can work together or run the business together, they can both continue on as co-owners. This is important as this will allow them to continue on and eventually pass down the business to their children.
· Sell the Company – If they cannot agree to any of the above or some resolution, the company may have to be sold. This is terrible for the financial interests of both parties but sometimes divorces can get messy and intelligence goes out the window.
· Divide the Business – Like other large-scale companies, if the two sides cannot get along, then the business (depending on the size and the type of business) is divided into two separate businesses.
For more information on divorce law and to schedule a consultation for further advice, contact Mr. Veinger today.