What Happens to a Family Business In a Divorce?
Starting and running a successful business is a highly rewarding experience. The sweat and tears that go into such an endeavor can take a toll on anyone mentally. That is why spouses might decide to enter into a joint partnership to help with the running of the business. Complications on who gets what could arise in the event of a divorce. A couple might divorce when the business is doing exceptionally well. That is why it will be a good idea to look for a divorce attorney Mesa so that there are no grey areas when it comes to subsequent ownership after the assets have been divided.
Was the Business Acquired During Marriage?
This will depend on the living status of the divorcing couple. In the states of Arizona, all assets and debts that were acquired during the matrimonial union should be split evenly in the event of a divorce. The spouses can mutually agree on the division of property but the court could step in when there wrangles. If the business is a gift or an inheritance, it could be considered separate property even if it was transferred during the marriage.
When a Spouse Owned a Business Before Marriage
A spouse could have a valid claim to the business even if the other partner established it before the marriage. It is possible that a spouse might have played a contributing role in the growth and success of the business. You should be reaching out to a local divorce attorney when your business gets involved with community assets. Even if the separate asset gets commingled, it doesn’t necessarily mean that it should be split 50/50. The court can decide to assign the spouse assets on a pro-rata shared system.
What If The Business Has Debt?
The business will need to be carefully valued for the purposes of asset division. It is imperative that the spouses are hiring the services of a forensic accountant in order to come up with the true value of the business. The accountant will look at the tax returns, P&L statements, and financial reports for the real value of the business to be assigned. The business will also be compared to similar ones in the locality in order to have an accurate assessment of the value. For businesses with significant value, it is advisable to get in touch with a family law lawyer to help with the valuation. The attorney can also assist with the divorce negotiations as they’ll be in a better position having determined the value of the business.
Options For Settling a Family Business Assets
There are not a lot of options in dealing with a family business in case of divorce. It is possible for the business to be shut down if the spouses can’t reach an agreement on the division of assets. At Jensen Family Law, you can expect a free consultation so that you’re aware of all your options. For more information, you can check out https://www.familylawattorneymesaaz.net/
Jensen Family Law – Mesa
Address: 3740 E Southern Ave Suite 210 Mesa AZ 85206
Phone: (480) 999-2321