Divorce Involving a Business
If you and your spouse own or operate a business together, but you are getting a divorce, you are right to be concerned about what will happen to the venture that has absorbed so much money and time over the years. Even if you are the sole owner, it is not safe to assume that the court will overlook your business when dividing assets. Working with a collaborative divorce lawyer, like the experts we have on our team at the Law Offices Of Cara L. Santosuosso, LLC, will ensure that you are treated fairly and that your rights are protected. We understand that divorce is stressful, especially when you are worried that the business that you have worked so hard to develop could be on the line–we are here to help allay fears and advocate for you.
Division Of Assets In Ohio Divorce
It is natural for a business founder and owner to feel that they alone own their business–no doubt you feel this way too. However, Ohio law may see things differently when it comes time to divide assets during a divorce. This is especially true when considering the assets that are related to a business.
In Ohio, martial property is considered to be anything that a couple owns together, as well as anything that they acquired during the marriage. Marital property can also be the value that was added to an asset during the duration of a marriage, even if either party owned the asset prior to marriage, such as an increase in value of real property, a business, or a retirement or other financial account.
Since Ohio is an “equitable distribution” state, divorce courts typically aim to distribute property and other assets to both parties in a fair–but not always 50-50, or “equal”–manner. Knowing that this is the reality of divorce in Ohio can help you to better understand why it is so vital to work with an experienced divorce lawyer in Ohio when you own a business and are seeking a divorce.
Valuation Of Assets In An Ohio Divorce
To get a better idea of what is at stake and how your business assets may be divided in a divorce, it is important to know the factors at play. Assigning value is the first step to knowing what a business is worth, how much value was added during the marriage, and how much of that value will be awarded to either party. A qualified appraiser will need your full array of business records in order to ensure that tangible property, such as equipment, inventory, machinery, owned buildings and bank accounts are included in their appraisal.
Liabilities, intangible assets, and profit are also key considerations that an appraiser must use to help them determine your business’s actual value. Once this number is determined, and value is assigned, other factors will be used to determine how the business will be divided in a divorce. These factors can include:
- Whether the business existed before the marriage
- The percentage of the business that is owned by each partner
- Level of involvement of each spouse in running the business
- Professional qualifications and customer relationships of each spouse
- Involvement of family funds to pay for business needs
- Ability of one partner to buy out the other’s share in the business
- Ability of each spouse to earn a similar wage elsewhere
- Division of remaining assets and liabilities
All of these details will be taken as a whole to get a better picture of what life would be like for both parties with and without the business, and to determine which individual is best suited to carry on the business, if that is the goal. If neither party wants to continue the business, or if they are unwilling to agree, the simplest solution may be selling the business and equitably dividing proceeds.
In every aspect of this decision, the roles of each spouse in not only acquiring but also building and running the business will be considered, along with individual contributions to the running of their house and family. If one spouse was the sole or majority operator of the business, it is common for the court to grant them ownership, while then granting other comparably valued marital assets (e.g. investment properties or retirement funds) to the other spouse. If both spouses worked together in the business, an equitable share of the business could be awarded to both parties.
Having a knowledgeable and experienced divorce attorney on your team is vital so that you can retain the assets that matter the most to you while still keeping things equitable between you and your former spouse. In the case that your spouse would require spousal support due to their low income and your retaining control of the business, legal expertise will ensure that the determination is fair and equitable for all parties involved.
Benefit From Working With A Collaborative Divorce Lawyer In Cleveland
Divorce can be one of the most difficult and stressful times in your life. That reality is only compounded when you need to divide your business in what can end up being an emotional and complicated process. With help from our team of collaborative divorce lawyers in Cleveland, you can be sure that your rights and interests are protected and that the process will be as streamlined as possible. When you have the right experts on your side, you can enjoy a sense of calm and peace of mind that are truly priceless. Contact us today to learn how we can help to preserve your business during divorce, or feel free to schedule your consultation online.