How Are Business Assets Divided In A Divorce?

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Attorney Kelli Hooper | 888-558-1353 | Schedule Your Consult Today

“In my practice, I’ve seen all kinds of businesses. I represented a family that owned a funeral vault business…I’ve represented musicians and songwriters that obviously have royalty issues, [and] NFL players…that have sponsorships. I think I’ve seen just about everything when it comes to the valuation of business assets.”

How are business assets divided in a divorce? It depends on when those assets were obtained. If you own a large amount of business assets and are dividing them through a divorce, it takes a skilled attorney to accurately value them and estimate fair divisions.

Kelli Byers Hooper is a family law attorney with KBH Law, Inc. in Atlanta’s metro area. In this video, she explains how a prenup can be extremely helpful for anyone who owns considerable business assets and is planning to enter a marriage. She also explains some of the cases she’s handled that have involved business owners and athletes with many assets.

To learn more, contact the attorney directly by calling 888-558-1353 or by submitting a contact form on this page.

Key Takeaways From Kelli Hooper:

Closely-held businesses are often dealt with in divorce, and an attorney can help ensure that they are valued fairly.

If a business is created prior to a marriage then, in most states, it is considered a separate asset of the person who originally created it. But, if the business is created during the marriage, it is considered to be a marital asset. In this case, the business’s valuation is determined by when it was started and each spouse’s level of involvement in the business. Does one spouse own it, or do both? Do both partners have a role in the business’s operations?

Additionally, Hooper says, she would want to take a look at the business’s operating agreement. What is its structure? Does it have shares? In this way, an attorney can determine the total assets of a business and how many people it is split among, and use a business valuation expert to obtain an accurate summary of how much the business is worth.

By determining a business’s worth and the level of involvement and investment each partner has in it, the attorney can ensure that the business is divided fairly among all parties.

A prenup is a strong and effective way to ensure that the assets you hold remain yours if the marriage ends in divorce.

Even if you think your business isn’t worth anything, says Hooper, it is always wise to have both parties sign a prenup prior to the marriage. Your business could grow significantly during the marriage, or it could contain assets you were unaware of. Without a prenup, any uncovered assets that you have are vulnerable to being split between you and your partner in a divorce.

In addition, a prenup can help you in the event that your business becomes a marital asset. If you have a business that you operated prior to the marriage, it is obviously yours and your partner holds no investment in it. However, if you own a business by yourself and then, during the marriage, your partner makes labor or financial contributions to it, it can be argued that the business—even if it previously was yours alone—is now a marital asset. In this case, if a prenup is in place, you would measure the value of the business at the start of the marriage against what it is currently. The difference may be split between both you and your partner if it is determined that there is a significant increase in the business’s performance.

Ask an attorney to help protect business assets during a divorce.

With any dissolution of a marriage, it is important to fairly value all assets and divide them between the separating spouses. With businesses—especially if both spouses are involved in a business—it can be difficult to understand what each party is entitled to. A divorce attorney will help you divide assets fairly and keep a business that belongs to you.

To learn more, contact Kelli Hooper directly by calling 888-558-1353 or by submitting a contact form on this page.

Disclaimer: This video is for informational purposes only. In some states, this video may be deemed Attorney Advertising. The choice of lawyer is an important decision that should not be based solely on advertisements.