Dealing with the future of a family business can be yet another complex issue in your already stressful divorce proceedings. The best way to deal with it is as a small business owner is by taking a preemptive approach rather than waiting until the divorce is underway.
It’s a good idea to address the potential division of the business in a prenuptial agreement before marriage (or a postnuptial agreement if the business is launched during the marriage).
Work with an experienced attorney and be sure to cover the following issues:
- Define what is to be considered “separate property” and “marital property”—put it in writing to keep the company intact and take care of your obligations to your spouse.
- Determine how the company will be valued (if appropriate)—set up a way to assess the value of the business. Common practice allows for one independent appraiser to be hired, but it may be beneficial to require more than one and then to figure an average.
- Specify how the payout will occur—taking several years to pay out will help the business to survive.
Remember to be thorough and be fair, doing both will not only improve your chances of it being upheld in court, it will ensure that you are doing the right thing for all involved.
In the absence of a Florida prenuptial agreement, the division of the business will be left up to the Florida divorce court. In contrast to “Community Property” states that split assets 50/50, Florida uses “Equitable Distribution” and many other factors are taken into consideration when the courts rule on what is deemed fair or equitable for both spouses.
Florida courts encourage the parties to work together for the benefit of the business. When this is not feasible, generally the business must be sold and its net proceeds be divided or one party must buy the other party out. This determination can involve a lengthy legal battle and may result in the ultimate failure of the business.
Therefore, in the absence of a prenuptial or postnuptial agreement that specifies how the business will be divided, it is critical to enlist the services of a skilled lawyer to protect your interests.
Board Certified Marital and Family Law Attorney Charles D. Jamieson understands that divorce is an extremely sensitive and important issue. Thanks to extensive experience and a focus on open communication, Attorney Jamieson adeptly addresses the complex issues surrounding divorce while delivering excellent personal service. To discuss divorce in Florida, please contact The Law Firm of Charles D. Jamieson, P.A.The Law Firm of Charles D. Jamieson, P.A. or call 561-478-0312.