Divorce is a hard thing to get through. If you are ending your marriage, it will most likely be emotionally draining. You will be dealing with a wide range of feelings and emotions that can impair your decision making, especially if there is a family business involved. You will want to make sure that you have a divorce attorney that has experience in handling divorces where a family owned business is an asset that is being considered during these proceedings. You must do what is necessary to get your fair share of the wealth of the company. Retaining the services of a Dallas divorce attorney will ensure that you settle this part of the divorce in a way that is equitable.
The Most Important Asset
The division and distribution of property, money, and other assets are standard in a divorce. If you have built a thriving business that supports a more than comfortable lifestyle, then it is probably the most important asset in the marriage. When you divorce, a court will need to determine the ownership rights of the company.
The judge will look at when the business was established, how the money was raised to start it, the contributions that you and your ex have made to the company, and how the value of the business has changed over time.
The division of the company as an asset is still contestable even if it existed before the marriage. If your ex already had the company up and running before you met and it can be proven that the knowledge, skill, and work you put into the business led to a significant increase in its growth and value, then you are entitled to a share that is commensurate with the latter.
Alternatively, a company that you inherited or received as a gift may not be considered marital property. If your ex is not named as co-owner and has put no work into the business or made any financial contributions to it, a judge may deem it separate property.
A Dallas divorce attorney will be able to guide you through obtaining all of this information, in addition to developing a strategy that is favorable to your financial future. It is important that you do not attempt to prove ownership without the assistance of an experienced divorce attorney because you may negatively impact your case and it will be difficult to undo these types of mistakes.
Valuing the Company
Once a judge has decided how to classify the business—as either marital or separate property—it will then need to be valued. This is where having an experienced divorce attorney is important. They will be able to provide the court the necessary evidence and facts to prove the business’s value. Your attorney may also have a forensic accountant or an appraisal professional come in to review information about the business, including tax returns, revenue, assets and liabilities, and various financial documents that indicate its financial health and status. Your attorney may also call expert witnesses to testify about the value of the business.
Settlement Options
If the judge decides to divide ownership of the company equally between you or to give one of you a slightly larger share than the other, then you will have difficult decisions to make. You will have three options:
- Buy out
You may want to buy out your spouse. This is an especially appealing option if you run a professional services firm together; e.g. a law, medical, or accounting practice.
- Sell
You can sell the business and split the proceeds between you. To make this happen, you must both agree. If your ex insists on continuing to operate the business, you will need a court order if your desire is to sell it.
- Remain Co-owners
You and your ex may decide that the company holds too much promise to sell it. You may also conclude that while you cannot function as a married couple you work well together as business partners. If you can work out your business relationship, then it may be possible for you to remain co-owners and operators of the company.
Before making your decision, you should consult with a Dallas divorce attorney. Call our law offices today at any of our convenient locations and get a free consultation.
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