We are often asked, “If I owned my company before getting married, is it considered separate property in our divorce?”
What happens to a business in a Louisville divorce? How is the interest in the company managed during property division if the spouse in question owned it before getting married? How does the division of ownership in a business interest change when the company opened or was acquired during the marriage?
If an individual owns the business prior to marriage, the business is typically considered the separate or “non-marital property” of the spouse who owns it. In these types of cases, the company in question will be considered to be the separate property of the spouse who owns the company.
However, there can be questions raised regarding the appreciation of the value in the business interest that occurred during the duration of the marriage, as well as property division issues that arise if marital funds were ever used to sustain or invest in the company. The resulting “commingling” of marital funds with an otherwise “separate” business asset can fundamentally change part or all of the fundamental nature of the property as a “separate” asset.
“If I owned my company before getting married and am considering a divorce or am served divorce papers how should I handle it?”
Your company is obviously an important asset. We are sure other aspects of your divorce, such as child custody and visitation, may also be important to you. This is why you need the counsel of an experienced Dodd & Dodd Louisville divorce attorney with decades of experience.
When a business is started during the marriage, the equity in this asset will almost always be equitably divided equally between the former spouses during the process of property division.
The division of the equity in a business asset during a divorce will almost never require the business to be sold. The process of seeking an agreed-upon (or Court-ordered) valuation is the starting point for determining the marital portion of the equity in the company. Could the company be offered to and purchased by a willing buyer, and if so, what would it be worth? What would the resulting equity amount to? What is the company’s annualized income? How will the owner’s unique business skills and experience affect the company’s “Goodwill” if it is to be sold? Does goodwill affect valuation?
The division of a business asset in a Louisville divorce is quite financially and legally complex. There are tax issues to be considered as well. The experienced divorce attorneys at Dodd & Dodd Attorneys, PLLC have decades of experience and legal skill in divorce cases involving business ownership interests. We understand the impact of asset valuation and the determination of equity as it relates to retained business ownership as well as the allocation and offset of any resulting equity during marital property division.
“If I owned my company before getting married, why do I need an experienced divorce and family law attorney?” If you or your former spouse own a company, business, or professional practice you need an experienced Louisville divorce and family law attorney to protect your interests.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.
