Business Owners & Divorce

When a business is part of the marital estate subject to division in divorce, a standard case is quickly transformed into a sophisticated legal matter requiring specific knowledge. A business is often one of, if not the most valuable asset a couple owns, and how you handle it during a divorce can impact both your financial stability and the future operations of the company.

At Robbins & Licavoli, PLLC, we understand the unique pressures business owners can face during divorce. We provide strategic legal counsel to help you protect your professional interests while pursuing a fair and equitable resolution to your divorce.

The Marital Property Determination

The first step in addressing a business during divorce is determining whether it is marital or separate property. Generally, if a company was started, acquired, or grew in value during the marriage, any portion of value attributable to the marriage is considered marital property. This makes it subject to equitable division.

Even if you owned the business prior to the marriage, your spouse may still have a claim if:

• Marital funds were used to support or grow the business.
• Your spouse contributed labor or effort to the business.
• The business appreciated in value during the marriage due to active management.

Distinguishing between marital and separate components of a business requires a meticulous analysis of financial records and, in some cases, an existing prenuptial or postnuptial agreement.

Properly Valuing the Business

You cannot divide an asset until you know what it is worth. Business valuation can easily be one of the most contentious and technical aspects of a high-asset divorce, as a proper valuation must consider:

1. Tangible Assets: Real estate, inventory, and machinery.
2. Intangible Assets: Goodwill, brand reputation, and intellectual property.
3. Liabilities: Business debts, loans, and future obligations.
4. Cash Flow and Earning Capacity: The historical and projected income of the business.

We can work with financial professionals to determine an accurate value of your company, ensuring that you are not relying on guesswork or undervalued figures presented by the other party.

Strategies for Structuring a Settlement

While it may be unavoidable in some divorces, dividing a business does not necessarily mean selling it or closing its doors. Our goal is to structure a settlement that allows the business to continue operating smoothly while satisfying the other spouse’s equitable share. There are several ways to approach this:

• Buy-Out: One spouse “buys” the other’s share of the business using marital assets like property or cash.  
• Offsetting Assets: One spouse keeps the business while the other receives assets of equal value.  
• Payment Plans: A structured settlement allows the buying spouse to pay over time if immediate funds are unavailable.
• Co-Ownership: In certain rare cases, spouses may agree to jointly own and run the business.  

A skilled lawyer can help you determine what the best settlement strategy is to keep your business thriving during and after the divorce process.

Protecting Your Business and Your Future

Do not leave the fate of your business to chance when errors in this process can lead to the loss of control over your company or an unfair financial settlement. Contact Robbins & Licavoli, PLLC today to schedule a consultation. We will help you understand your rights and develop a strategy to protect your business interests throughout your divorce.