What will happen to my business when I divorce?
Divorces can be devastating – to the couple, children, extended family, finances…even the family business.
- Did you start a business with your spouse?
- Did one spouse start a business before you were married but incorporate the other spouse into the business?
- Did one spouse start a business before the marriage but the other spouse has had nothing to do with it?
If you are a Jupiter business owner and you are considering getting a divorce, you are probably also concerned about what will happen to your business.
Or, perhaps you are the spouse of a business owner and you are afraid your ex will get to keep all of the business because technically they “own” it, despite all your involvement and hard work over the years.
In either case, you need a qualified Jupiter divorce lawyer to advise you and help you navigate this stressful and often complicated process. George Gelb has been representing Jupiter business owners for over 35 years, and he can help.
While the issue of divorce and the family business can become very technical and complex, here is a little information to help you have a better understanding of what you may be up against:
Equitable Distribution and the Family Business
First off, Florida is not a community property state. It is an “equitable distribution” state. While community property states require an equal division of marital assets, equitable distribution states require only a fair or equitable division of marital assets. Florida law requires an equitable division of marital assets (and debts) but in many cases the division does end up being equal.
First, the court must determine what assets are Separate and what assets are Marital. Separate (non-marital) property remains the property of its owner and is not subject to division in the divorce.
Separate property includes:
- assets acquired before marriage
- assets acquired during the marriage by gift (not from spouse) or inheritance
- assets defined as separate property by a prenuptial or postnuptial agreement
- income from separate property (unless it has been “commingled” or otherwise treated as marital property)
- items purchased or exchanged with separate property
Marital property basically covers any assets or debts acquired during the marriage – even if the title is in the name of only one spouse (unless a written agreement states otherwise). Assets include money, property, and benefits such as retirement accounts, deferred compensation, or profit-sharing.
Note: This is a very basic explanation. Contact our office for a more detailed analysis of your assets.
Once the court has determined which assets are separate and which are marital, it will determine what constitutes an equitable division of the marital assets, taking into account a number of relevant factors.
If your business was started during the marriage, developed during the marriage, and your spouse has taken an active role within the business, it will be considered marital property subject to division upon divorce, even though you are the sole owner of the company.
On the other hand, if the business was started and developed well before the marriage, and your spouse has not been involved with the business, it will likely be deemed your separate property.
George Gelb is an experienced Jupiter divorce attorney, specializing in business valuation for over 35 years.