Are you the spouse of a business owner in a Louisville divorce? There are many things you need to know about how the marital interest in the business must be managed as part of the property division in your divorce. This is why it is important to seek the proven, experienced advice of the divorce and family law attorneys at Dodd & Dodd.
There are far too many complex issues to address in a format such as this, but it is our hope to provide a bit of foundation as you approach the process of characterization, valuation and ultimately marital property division of the business asset.
The first question as the spouse of a business owner in a Louisville divorce will be the determination of the “characterization” of the business asset as either the separate property of your spouse, marital property or a blend of the two. Here in Kentucky, our state almost always considers any business created during the course of a marriage to be marital property. If the business was formed prior to the marriage and has been sustained without any marital funds or labor it may be characterized as “separate” property. If it was formed prior to the marriage but marital funds or labor have been commingled with the business or used to support it at least some portion will probably be characterized as partially a marital asset, subject to division.
The next issue the spouse of a business owner in a Louisville will encounter is known as “valuation.” Valuation is a complex legal and financial process to establish the genuine value of the asset so that the marital interest can be appropriately apportioned during property division. It is important to understand that many business owners in the past have attempted to hide assets or take steps to diminish the value of a business prior to divorce. You will need skilled, experienced attorneys and perhaps forensic accountants and a strong appraisal expert to reach an accurate valuation.
If the asset is characterized as marital property, your spousal interest in half of the business will be another critical issue. As the spouse of a business owner in a Louisville divorce you may be awarded half of the valuation of the marital property interest in the business. In many cases, the provision of those funds “today” may threaten the viability of the business itself and could affect the business owner’s ability to continue with maintenance, child support and providing for any children you share. It may be prudent to seek an alternative to consider alternatives to taking that “half” today. You may offset this interest with other marital property or assets, a secured interest in the business itself or a combination of these. There may also be substantial tax implications at stake. Draw on the experience and guidance of your attorney to work through these issues, protect your interests and ultimately accomplish your goals and objectives.
You will need a strong attorney to protect your interests during characterization and valuation. You will require sound counsel during property division negotiations. 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.