No one enters a marriage thinking that there is a possibility that it could end one day. For many of our clients it is difficult to talk about protecting their assets in the event of the divorce. This reality is no different for business owners. In fact, many business owners end up losing part or all of their companies during the process of a divorce.
There are different considerations for businesses started prior to the marriage versus those started during the marriage. Businesses started during the marriage, either through a partnership, limited liability corporation or sole proprietorship, are considered a marital asset and are subject to division. If however, a spouse has contributed time and/ or resources to the company and the business has appreciated in value then that spouse will likely be entitled to an ownership interest in the event of a divorce.
The process in which the company subject to a division of ownership due to a divorce is valued can be a complicated matter. Typically, when a couple is divorcing the Court will determine the assets and liabilities that each person is entitled to and responsible for based on what the Court decides is fair. However, with companies the valuation of assets is typically done with a qualified expert who can examine the company’s financial records and make a valuation of the ownership interest. The focus here is on the value of the business both at the time of the marriage and at the time of the divorce. Forensic accountants are used for this and can acquire and interpret all the necessary documents needed for the valuation.
The valuation of a company in the event of a divorce is critical to the determination of potential claims such as alimony, equitable division of the operation and child support. The advice and counsel of a family law and divorce attorney who is experienced in these matters is necessary to ensure that all of your interest are protected. TheFaucette Law Firm has extensive experience representing clients in matters related to contested and uncontested divorce, child support and custody, modifications and adoptions. If you are in the Douglasville, Marietta or Metro Atlanta area contact our law firm today for a consultation.