Divorce is a multifaceted process. Many issues must be resolved, such as spousal support, child support, child custody, and the division of assets and debts. If the divorcing couple owns a business together, the process becomes compounded. What happens to your business during a divorce? Should you keep it? Should you let your spouse have it? What happens if you own the business, but
not your spouse? Does the spouse get a piece of the business in the divorce? These are all questions that can be addressed with a skilled family law attorney in Maine.
The first aspect to consider when there is a business involved with a divorce is if the business is considered a marital asset or separate property. Generally, was the business owned before the date of the marriage or after the legal union? Was the business acquired after the marriage with funds from one spouse? Who contributed to the financial and other needs of the business? Maine is an equitable property state. Instead of assuming marital property is owned by each spouse, the law mandates that the courts divide it equally when there is a divorce.
Once these questions are answered, your business should be valued. It is not often that divorcing spouses agree on the value of their business. Having it professionally valued will provide everyone with a solid dollar amount representing the worth of the business. This can be done in one of the following ways:
You may want to hire an Accredited Senior Appraiser (ASA), Certified Business Appraiser (CBA), or Certified Public Accountant (CPA) with an Accredited in Business Valuation (ABV) designation to determine the worth of your business. If your divorce ends up going to court, the judge will likely side with the expert that has a more credible evaluation. While it might seem easier to let a judge decide, it will likely be extremely time-consuming. More time ends up leading to a more expensive divorce. For this reason, you and your spouse might want to consider compromising, even if you must hire a mediator in addition to your own Maine family law attorney.
After your business is valued, you and your spouse can work together to determine what should happen with the business. There is no one size fits all solution, and many factors will need to be taken into consideration. You have three different options:
Keep in mind that if the business requires a license, only the licensed spouse can be the owner. A buyout option is only an option if there is sufficient cash or other liquid assets. If neither of the other two options is viable, or you and your spouse cannot agree, it might be best to sell your business. After it sells, you and your spouse can divide the profit. If your spouse does not agree to the sale of the business, a court order will be required for a sale.
Some spouses are amicable enough that they can continue to remain co-owners of the business. In some cases, one spouse takes care of the management of the business, and the other simply has a financial stake in the business. If a co-ownership will continue, each spouse assumes the risk of receiving more or fewer assets depending on the future of the business.
If your divorce includes a business, it will most likely be more complicated than those that do not. However, when you hire a Maine family law attorney, you can be assured that these complexities are being dealt with in the best ways possible. At the Maine Divorce Group, we will educate you about your options and fight for your wishes. Contact us today to learn more about how we can help business owners in divorce.
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The attorneys at The Maine Divorce Group understand how emotional and complex the divorce process can be and we are here to help.
Call to speak with a member of our team today, who can discuss your case and set up a consultation with one of our attorneys.
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