Who Gets the Family Business in a Divorce?

It’s not always clear who gets the family business in a divorce. Marriage tends to make a business shared property between married partners, meaning the property must be equally divided for a divorce to proceed. Fortunately, there’s more than one way to divide a business, many of which allow the business to remain operational.

Our divorce lawyers at Fighter Law can walk you through the process of valuing your business under Florida’s Equitable Distribution laws. We can also help you determine what future you want for your business, how involved you want to be in that future, and what financial impacts your decisions may have on your life.

Understanding Florida’s Equitable Distribution Laws

The Sunshine State’s equitable distribution law states that a couple must share assets and debts as they dissolve their shared estate. However, the law applies specifically to marital property.

Family businesses do constitute marital property in the eyes of Florida lawmakers. It does not matter whether one spouse acquired the business individually or whether a couple purchased the business together. The only way a family business can avoid becoming marital property is if one partner had nothing to do with the business’s establishment and daily operations.

Each spouse has the opportunity to prove that they financially contributed to the value of the business. In doing so, both partners can argue that they deserve a portion of the business – be that in the form of control or financial benefits – after they finalize their divorce proceedings.

How to Value the Family Business Prior to a Divorce

The process of valuing a business requires a couple and their applicable attorneys to determine the following about the business:

• Book Value: This is the combined value of the assets and liabilities recorded in the business’s ledgers, allowing for growth and decay over time.
• Market Value: How does the value of a family business compare to that of businesses in the same industry? Couples can work with their attorneys to determine what the market value of the business would be if they prepared the business for sale.
• Appraised Value: Divorcing couples are required to have a professional appraise their business and present an estimate of its total value. This third-party perspective should be as objective as possible and account for recent fluctuations in a relevant industry.

Divorce attorneys have the right to request access to a business’s financial records and assets to determine the value of a family business. This makes it easier for all lawyers involved to untangle a couple’s financial connection to their business.

Options For Distributing a Family Business During a Divorce

After you determine the value of your family business, it’s then time to determine how you want to divide it between you and your ex-partner. You can divide a business’s ownership and value in five different ways, including the following:

• You can keep a business operational and share ownership with your ex-partner, with both parties serving as the business’s co-owners.
• You can buy out your spouse’s interest in the family business, removing their ability to influence the business’s growth and benefit from its income.
• You may use the business as a bargaining chip, exchanging full ownership of the family business in exchange for another equally valuable property.
• You may work with your ex-spouse to sell the business to a third party, after which point you can divide the proceeds from the sale between you.
• You can dismantle the business alongside your ex-spouse and divide the remaining resources and debts between the two of you.

You can meet with an experienced divorce attorney to discuss which approach might suit your circumstances best.

Work With Our Lawyers to Protect Your Property Today

Divorces are emotionally fraught before you involve the family business. If you’re struggling to understand Florida’s property division laws or you need help fighting for control of your business, get in touch with our lawyers for legal guidance. 

Board-certified lawyers Thomas Feiter and Jessica Travis are here to make it easier for families to civilly discuss the future of their small businesses. If you’re ready to learn more about the steps we can take to make your divorce proceedings more straightforward, book a free case consultation with our team online or by calling (407) 344-4837.

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