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Dealing with dividing a business during divorce

On Behalf of | Dec 26, 2018 | Divorce

When people in Florida who own a business get a divorce, they must determine what the business is worth and how it will be divided. Accurate valuation is important. An appraiser might be recommended by a financial or legal professional, or they could be part of a professional society of appraisers.

Appraising the business involves more than just looking at the books and taking into account the value of equipment and other assets. There are also intangible considerations, such as the value of the company’s reputation. Furthermore, some businesses are run informally, and there might have been loans or other deals made merely on a handshake. Some people might make an effort to conceal the value of the business or make it appear as though it is worth more.

Once there is an accurate valuation in place, the next step is deciding what to do with it. The couple may sell it, keep it or split it. Their decision will depend upon a number of complex factors including whether one or both owns it and whether there is already an agreement in place about buying out a spouse in case of divorce. If one spouse does not have the money to buy out the other and there is not an asset that can be exchanged, a promissory note might be necessary.

Like a home, a business may carry emotional connotations for its owner that make it more difficult to divide than some other assets. However, taking steps to increase the likelihood of financial security after divorce is important, and people should not allow their emotions to interfere with this goal. A person might want to talk to an attorney about how to stay focused on the financial and legal elements of negotiations or strategies for going into litigation.