How Is A Business Divided In A Divorce?
Your business is likely your most important and complex asset. In a divorce, it is important to protect your business interests and ensure proper valuation and division.
In Colorado, any property obtained during marriage is considered “marital property.” The state also requires equitable distribution, which means all marital property must be divided fairly rather than a simple 50-50 split.
There are many factors to consider when dividing a business, and the process is complex. The attorneys at The Law Center P.C. have the complex asset division and business law experience to help you get what is fair.
Factors To Consider When Dividing A Business
Equitable distribution can make asset division contentious. You may be able to retain most or all of the business, however, if you can prove that is a fair outcome. We can help you determine how much of your business you will be able to retain.
Factors to consider include:
- When was the business started? You may have started the business prior to marriage. This will play a role in determining what is considered marital property.
- Who owns the business? You and your spouse may be co-owners, or you may own the whole business. Either way, it is likely a significant asset and may be the sole source of income for your family. This matters when determining equitable distribution.
- Expenses and valuation. It is imperative to have an accurate picture of business finances. This includes the value of the business at the time of your marriage and at the time of your divorce. We identify and retain business valuation experts who can help determine an accurate valuation.
You may have owned the business prior to your marriage, but the value of the business changed during your marriage. That change in valuation will be factored into the marital property.
No matter the size of your business, it is an important part of asset division. Our lawyers can help ensure that you get what you deserve when dividing a business in a divorce.
Questions About Business Division?
Q. My business is nothing without me. If I quit working tomorrow, there is no goodwill or value. How can the court order me to buy out an interest that I know is worth nothing?
A. Don’t try to apply the rules of accounting and finance to business valuations for purposes of divorce. They simply do not apply. Even though a dental practice with only the owning dentist would fail without him or her there, the court will still try to place a value on it. Worse yet, after it values the goodwill of the business for purposes of property division, the court may use the same revenue dollars to establish a spousal support figure. Suffice it to say, you need a skilled, experienced and knowledgeable attorney from The Law Center P.C. on your side to get the best outcome.