How will a Divorce Affect a Louisville Family Business or Professional Practice?

How will a Divorce Affect a Louisville Family Business?

How will a divorce affect a Louisville family business? Are you and your spouse considering the end of your marriage? Do you own a business together? Do both parties work for the business? What if the company is owned by the family of one of the spouses? Is the family business, in whole or in part, a marital asset? How will a divorce affect a small company or professional practice?

The short answer is this: Here in Kentucky marital property is generally to be equally divided between the two parties. If part or all of the family business in question is marital property, that interest must be divided between the two parties as part of the marital property division and settlement process.

If both of the soon-to-be former spouses are working together in the business it is important to separate and prioritize the “business” outside of the marital relationship. In some cases, the parties can continue to work together in a productive way at work, they simply can’t continue as marital partners. In other cases it may be necessary for one of the parties to step away from the business.

In most cases, the owner(s) of a business wants to maintain their ownership of the company and wishes to have ownership after the divorce is completed. When this is the case how will the divorce affect a Louisville family business?

The central question is: what portion of the ownership of the business is marital property?

This can be a legally and financially complex issue. The first step is to establish the valuation of the business itself. Valuation is based upon expert appraisal, not the claims of the business owner(s). Valuation can be based upon a multitude of factors including the assets and liabilities of the company, annualized sales over a period of time and the amount of time the company has been in business. What would a willing buyer pay a willing seller in an arm’s-length transaction involving the family business?

When was the business acquired? How did each party come to be involved in the business? Was the business formed after the date of the marriage and before the date of separation? If it was in place before the date of the marriage, what marital funds, energies and work were invested in the company along the way?

There are many issues which will determine the answer to the question “how will a divorce affect a Louisville family business?” There is a lot at stake and you need the proven, experienced counsel and representation of the divorce and family law attorneys at Dodd & Dodd.

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.