What If I’m Divorcing And My Business Value Has Changed?
If you are a business owner who is getting divorced, you may be wondering how division of assets will be handled when it comes to your business. Of course, it is possible your business was worth a lot more (or less) in prior years, and the valuation at the time of your divorce may surprise you.
Gathering the information you need to have a full and fair divorce agreement is a necessity. Putting off getting a valuation for your business will not help the situation. The sooner you bring set numbers to your Bucks County family attorney, the sooner they will be able to advise you on how to obtain your desired objective.
Possible Business Division Solutions
When you divorce, assets are divided. How they are divided will depend on your situation. Often terms can be negotiated and a mutual agreement can be reached. If there are ongoing disputes, mediation could provide a path to an agreement. And when the split is particularly hostile, court will be required.
Businesses owned by one or both spouses are valuable, particularly if they are income generated. Dividing a business differs from allocating resources from financial accounts or property because a business often needs to continue to operate in order for the profit to continue to be generated.
Sharing with your attorney what you hope will happen to your business is an important step. Your attorney can’t fight for what you want until they are clear on your goals, which could include one of the following solutions.
- Disperse shares of your business to your spouse while you retain ownership.
- Buy your spouse out of the business.
- Agree to sell the business and divide funds from the sale.
- Use income from the business to provide spousal support.
All of these could be agreed upon but later slight shifts could be required if the value of your business significantly rises or falls between the time you separate until the divorce is finalized. Any change in business value needs to be disclosed so financial settlement information can be updated and assessed. Any suspicion of large value assets being shielded will only lead to more legal issues.
Changes In the Economy
Typically, the time to secure a business valuation is months before you divorce. Having the value established too early could result in the value number no longer being accurate when it comes to asset division. And waiting too long will hold up the negotiation process.
If you own your own business and believe your marriage is ending, talk to a Bucks County family attorney about how the value of your business will be key during the divorce process. Having knowledge today can help you plan for tomorrow.
Are you considering a divorce and you own a business in Pennsylvania or New Jersey? Discuss the need for a private valuation with the compassionate legal team at Kardos, Rickles & Hand. Once our attorneys are familiar with the worth of your business, they can talk through possible asset and debt distribution scenarios with you. To begin a successful lawyer-client relationship, call 215-968-6602.