Washington Closely Held & Family Business Lawyer
Divorce is always difficult but when a case involves a closely held or family business, it can become even more complex. Your main concern may be ensuring the business not only continues to operate after the divorce, but that it thrives. Or, you may consider selling the business and dividing the profits between you and your spouse. Below, our Washington closely held & family business lawyer explains more about these options.
Business Valuations During Divorce
Before determining what should happen to a business in divorce, it must be properly valued. Valuing a business properly during divorce requires hiring an independent third party to determine the fair market value of the business by conducting an in-depth analysis. The business valuation expert will take many factors into consideration and use standard methodologies for valuing a business. Some of the factors considered are as follows:
- Whether one spouse started the business before getting married, or if the spouses established the business together
- If the business, or a share of the business, was inherited by one spouse
- The involvement of each spouse in the business throughout the marriage and since legal separation or divorce
- The existence of any prenuptial agreement or other contract that addresses ownership of the business or the distribution of it upon divorce or death
- Whether one spouse was responsible for the operation of the business, or played a larger and more active role in the company
- Whether there are other parties, such as partners, who may have an interest in the business
Businesses as Marital or Separate Property
It is just as important to determine if a closely held or family business is separate or marital property. In the majority of cases, at least a portion of a family business is classified as marital property, unless there is a premarital or prenuptial agreement that states otherwise. This is true even when one spouse established the business prior to the marriage. This is because the profits of a family business usually contribute to the household, such as paying the mortgage, utilities, or maintenance.
How to Divide a Closely Held or Family Business
Generally speaking, there are three options for dividing a closely held or family business during divorce. These are as follows:
- One party can purchase the other’s share of the business or relinquish more marital property of equal or greater value
- The business can be sold and the parties can divide the profits fairly
- The spouses can continue to co-own and operate the business if they are still cordial with each other
Our Closely Held and Family Business Lawyer in Washington Can Advise On Your Case
Our Washington closely held and family business lawyer at Bundes & Robert, P.C., understands the challenges that arise when trying to divide this type of significant property during divorce. We also know how to overcome them so you obtain your fair share. Call us now at 412-391-4330 or chat with us online to schedule a consultation with our experienced attorney and to get the legal help you need.
