Divorce impacts a couple in many different ways. You will go through asset division, child custody, alimony, child support, and more. But, if you or your spouse owned a business when the divorce paperwork was filed, you will have a lot of questions about how it will impact the family business. Our Georgia family law attorney delves into this topic in today’s blog.
Before explaining how a family business is impacted by divorce in Georgia, we must first look at marital assets. For the most part, a marital asset is defined as any asset acquired during the marriage. This includes any asset purchased by either of the spouses. Any assets acquired prior to the marriage remain separate unless they are commingled once you are married.
Separate assets are those acquired prior to a marriage that remains solely in the name of one spouse and not both. For example, if you owned a boat prior to the marriage and did not add your spouse’s name to the title, the boat remains a separate asset and not a marital asset. On the other hand, if a home owned by one spouse is improved upon or appreciates in value during the marriage, the other spouse could be entitled to a portion of the home’s appreciated value.
When you have concerns about dividing a family business in a Georgia divorce, call the office of Attorney Sharon Jackson, LLC, to discuss your situation.
The following questions should be answered when determining whether or not a business is marital or separate property:
The courts will also consider both spouses’ contributions to the business. In some cases, your attorney may employ the services of a business evaluation expert to help determine the true value of the business.
A business owned by spouses in Georgia is treated much like any other type of asset, but dividing it during a divorce can be much more complex that dividing a bank account, home, or boat. Georgia operates as an equitable division state when it comes to dividing assets, which means that items will be divided fairly.
Before a business can be divided in a Georgia divorce, a value must be placed on it. There are three methods used for valuing a business in Georgia is as follows:
It is up to the court to determine which method will be used to place a value on the business. The ownership of the business will often be assigned to the spouse who owns the most shares in the business.
If there are significant other assets present, they could offset the loss of the value of the business for one spouse. For example, one spouse could be granted ownership of the business if a home, vehicle, or other high-value asset is given to the other spouse.
In some cases, the court might order the business to be sold and then the cash earned from the sale is distributed equally between the spouses. If it has been deemed that the business is separate property, but it appreciated during the marriage, the non-owner spouse could be entitled to the value of the appreciated portion of the business.
There are four ways in which you can protect your business during a divorce in Georgia, as explained by Attorney Sharon Jackson, LLC. Those four ways include the following:
Should you decide to sign a prenuptial or postnuptial agreement, you can protect your business if the marriage ends in divorce. You can outline in either of these agreements just how ownership of the business will be handled. If you want to retain sole ownership of the business, make sure this is in writing in the agreement.
If the business is created during the marriage and you sign a postnuptial agreement, be sure to outline what must happen with the shares of the business upon divorce. Either one of these agreements can prevent a lot of arguments and stress about the business should you file for divorce.
Do you have questions about how your Georgia family business will be divided should you file for divorce? If so, call the office of Attorney Sharon Jackson, LLC, at (678) 436-3636 to schedule a consultation. You want to protect your investment and hard work. Let a Georgia family law attorney help keep your family business when filing for divorce.