Dividing a business in a Florida high asset divorce is a three-step process, requiring methods of identification of marital and separate assets, business valuation, and equitable distribution. Thus, a marital business is either divided by one spouse buying out the other’s interest in the business, splitting the proceeds between the parties after selling the business, or by spouses continuing to co-own the business.
Florida is an equitable distribution state, where marital property is distributed equitably during a high net worth divorce, rather than being divided 50/50.
However, the complexity of certain assets and the difficulties in determining their proper value may turn equitable property distribution into a highly complicated procedure.
One or both parting spouses may have operated a business during the course of their marriage and derived most of the income from this business. Or there are cases when the business may have been only a side-venture that did not produce much.
Regardless, adequately categorizing and valuing a business is crucial to having a fair and equitable division of marital property. High net worth individuals may have businesses that are:
There are several forms of business organizations, which include:
There are cases when an ex-spouse may hold a minority or majority interest in a business but not the entire business at the time of the divorce. Their interest in the family business would need to be valued as well. Before any valuation can occur, the business must first be categorized as either separate or marital property:
Once the business has been classified, the next step is business valuation. A certified appraiser will review the financial records, accounts payable and receivable, and visit any real estate that the business owns. A fair market or investment value will be established, or the sum of money that would be transferred between a buyer and a seller under reasonable circumstances and the amount that a buyer with specialized knowledge or motivation would offer.
When disputes related to the actual value of a business arise, Florida courts will try to split the marital assets equitably:
The court has to award the business to one or both parties following the business valuation process:
If the parties agree as to how the marital assets - including the business - are to be divided, a court will honor such an agreement as long as it does not appear one spouse is taking advantage of the other.
Marital assets are distributed equally in a Florida high asset divorce unless there is a justification to deviate from a 50/50 split. There are three ways to divide a marital business:
Florida court judges do not force parting spouses to work together in a business. Thus, commonly, one spouse will be awarded the business, and the other one their share of the value of the business.