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How Will My Divorce Affect My Business?

On Behalf of | May 23, 2022 | Family Law

Floridians who own a business will work hard to make it a success. Whether they bought an existing business or built one on their own, there is an undeniable connection between the person and the business. However, no matter how hard they worked and successful it has become, challenges can arise. One common problem has nothing to do with the operation of the business itself, the state of the economy, competition and overcoming business-related obstacles. It centers on family issues that can come up, namely a divorce. People who are heading for divorce will think about how it can affect their life’s work. Being aware of this and prepared can be fundamental to reaching a positive and acceptable result.

Property Division Will Also Impact A Business In Florida Divorce

People who are getting divorced might think about property division in terms of a home, automobiles, financial accounts, retirement accounts, collectibles and more. However, state law in dividing property also applies to a business. The primary objective is equitable distribution. That does not mean equal, but it does mean “fair.” The determination of what is fair might seem logical to one side but illogical to the other. This is especially true with a business.

If the business started before the marriage and no agreements were made to address it in the event of divorce, then the division will differ from what it would be if it was started after the marriage and both sides contributed substantially toward its creation and growth even if one was the main overseer of it. The court will assess myriad factors when deciding how to divide a business or to forge a reasonable split. This includes the length of the marriage; if the non-owning spouse contributed in other ways to its growth; the economic situation; if people put their career or education on hold; how desirable the assets are; the assets and debts; and much more.

If, for example, the business experienced a major growth spurt after the marriage and it is worth far more than it was before the marriage, then this is likely to result in a greater amount of it being shared as part of the divorce. If the business was essentially status quo from before the marriage and through its duration, then this too will be considered.

When A Business Is At Stake, Having Experienced Help Is Imperative

In short, the business can be affected by the divorce, but it is contingent on multiple factors that the court will need to assess to try and come to an equitable division. In these cases where a business might be at stake, the business owner must know how to protect it. Often, there could be a dispute as to how it should be split, how much the non-owning spouse might be entitled to under the law and if the business could be permanently damaged by the case. Having experienced, personable and aggressive assistance can be a protective measure to try and retain as much of the business as possible.

Since Florida is a unique and business-friendly atmosphere, people who are in the middle of this type of case should have assistance from professionals who are entrenched in the Sunshine State. Perhaps a negotiated settlement can be reached where personal property like a home is traded to the non-business owning spouse for the business owner to retain control of it. Or there could be a reasonable financial accommodation to address the lingering issues. Although not every divorce is contentious and people might find common ground, it is crucial to have guidance. Fear of losing a business can be emotionally traumatic and financially devastating. From the start of the case, it is wise to have professional help to try and handle business-related challenges during the divorce.