Divorce is one of the most difficult challenges many will face in life. There are many details to be addressed during this process, but few are more contentious than dividing marital assets. Indiana is a state where the courts view all property owned by the spouses at the time of filing for divorce as marital property unless there is a binding prenuptial or postnuptial agreement in place. Generally speaking, the division is not necessarily into equal parts but could be what is fair in the eyes of the court or the couple.
Determining the value of a business
Those who own a business could find the process of dividing assets to be particularly complicated. Much emphasis is placed on the valuation of the company (which may be disputed) by the two sides. Depending on the size and nature of it, attorneys may bring in CPAs or valuation experts, but valuation generally involves:
- Whatever funds a business can raise at any given time
- How the business is legally structured (corporation, LLC, sole proprietorship, etc.)
- How long the company existed and if there was ownership before the marriage
- The value of trademark, branding and proprietary information
- The amount of outstanding debt
- The amount of taxes paid and owed
- The timing of the contract renewals, seasonal fluctuations and other unique factors
A course of action for co-owners
Often the couple will both own the business. Different options for dividing the business include:
- Sell the business: This is a clean break where partners can split the profits, either to put into a new separate company or investment.
- One side buys the other: This can be done as part of dividing the marital assets, or an agreement can be structured for paying for it in increments over time.
- Dissolve the business: There are specific rules for doing this here in Indiana, but it can be a viable solution for avoiding debt or liability. This is another example of a clean break.
- Remain partners: The marriage may be over, but the business’s success may have been the best part of the relationship and one that can continue to be successful.
Picking the right attorney
Any knowledgeable family law attorney can handle a straightforward divorce for business owners. However, firms that also work on business issues can provide additional insight that may not otherwise be obvious. This can be a tremendous help regardless of whether the split is an amicable one done through mediation or is a contentious one likely to be litigated.