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Protecting business assets from divorce an important task

Being in business for oneself is a lot of work, and a lot of planning needs to be done to protect a business. Managing liabilities is especially important, and this includes both financial liabilities and legal liabilities. It can also include liabilities stemming from divorce.

Under Florida law, marital assets subject to division in divorce include assets acquired during the marriage, both individually by either spouse or jointly. Also included are increases in the value and appreciation of nonmarital assets to which either party contributes during the marriage or which result from the contribution or spending of marital assets. Couples who start a business together after marriage as well as couples in which one party enters the marriage with a business can, therefore, both face the issue of how to divide marital assets in divorce

Correctly determining the share a spouse has in the business is important to ensure an equitable division of those assets, but it can be complicated, depending on the circumstances. Also important is to take appropriate steps to protect business assets from divorce. Ideally, couples will determine how to divide business assets in divorce with a prenuptial agreement, but not everybody has the foresight to do that.

Another useful tool to protect business assets is a buy-sell agreement, which can set forth what should be done to protect the business in the event a co-owner is divorced. The terms can vary, but often require a former spouse to sell business interests received in a settlement back to the company at a controlled price.  

In a future post, we’ll continue looking at this topic, and why it is important to always work with an experienced attorney to protect business assets from divorce, in all circumstances.

Source: 2016 Florida Statutes, Title VI, Statute 61.075

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