During your high asset divorce, you may be concerned about asset division and how it may affect your business. Whether you run the business yourself or own a larger business with many employees, your business will likely need to go through an evaluation process. This process will determine if you are the sole owner or if your business will be considered marital property. The evaluation will also determine the value of the business.
Type of Property
When dividing assets, the courts will go asset by asset and determine which category it falls under — marital or separate property.
● Marital property is property acquired during the marriage or the increase in value of separate property during the time period of the marriage.
● Separate property is property owned solely prior to the marriage.
Because of the nature of high asset divorces, it is essential to determine what portion of the business is marital and what portion is separate property before the process continues to the division phase.
If your business is deemed to be entirely separate property, then you may be in the clear! However, a change in valuation may potentially be considered marital property. This is a complex evaluation process and experts are often engaged to advise.
If Your Business is Considered Marital Property
If your business is considered marital property, then you may need to negotiate to compensate your spouse for a portion of the marital value of your business during the division phase since Pennsylvania is an equitable division of property state. This may mean giving up another asset or combination of assets of equal value in exchange for ownership of the company, such as giving up the family home, vacation home, or vehicles. You may also opt to take on more debt, such as automobile or home loans in exchange for the business. Make sure to share with your attorney your wishes for your company’s future so they can guide you through the division process.
How to Prepare for Business Valuation
When you are about to reach the division of assets process in your divorce, you should prepare for your business to undergo valuation. This service is generally performed by an expert and may include compiling financial documents for review, preparing for an in-person visit to your main location of operations, and ensuring that all taxes have been paid. Share all of this information with your attorney so they can guide you through the process.
Montgomery County High Asset Divorce Lawyers
Preparing and protecting your assets during a high asset divorce can be difficult. Our high asset divorce attorneys at Shemtob Draganosky Taylor understand the importance of getting your divorce done correctly.
Call our team today at (215) 544-3974 or contact us online to schedule an initial consultation.