Do You Have a Business? Divorce Options From Portland Family Lawyer Susan Schultz
Divorce…what’s to say about it? It’s frustrating, emotionally draining (and financially in some cases), stressful, and more, but if you and your spouse have decided that divorce or separation is the only viable solution, then it’s important to get your ducks in a row. Also, whether you like it or not, that business you started or own may be swept up in the divorce proceedings.
Fortunately, you don’t have to be alone when fighting for or dividing your business interests with your soon-to-be ex-spouse. Instead, call Greater Portland ME family law attorney Susan Schultz McEvoy at Schultz Family Law. We boast an extensive track record of representing clients in a similar situation, and we have the resources, legal experience, and robust, yet compassionate, legal strategies to protect your interests and push for an attractive solution.
For a consultation, call Schultz Family Law today at (207) 210-6555.
Marital Effort Has Marital Value
If you or your spouse play a substantially active role in a business, the increase in the value of the business is arguably marital. The marital value will be quantified and allocated at the time of divorce.
Dividing the Business Interests on Divorce or Dissolution
Remember, when starting the divorce processes, your marital property may be subject to equitable distribution considerations in Maine family courts. As such,
Like most states, Maine has an equitable distribution or common law system of marital property. This means the marital property will be divided in any way that is fair. “Fair” is not necessarily “equal.” If all or part of your business is considered marital property, your business will need to be valued so that the marital value is equitably allocated in the divorce. This can be an extremely expensive endeavor requiring the engagement of a Certified Valuation Analyst (or two if your spouse does not like the opinion of your CVA). The problem with business valuations is that they are as much art as they are science. You need an attorney with the knowledge and background who can weed through the mumbo jumbo and get down to brass tacks. You will have that in Susan Schultz McEvoy.
Your Options for the Business in a Divorce
You have many options for your business during the divorce.
The Buy Out
One of the most common methods for the business in a divorce case is to have one spouse buys the other spouse’s interest in the business. For instance, a married couple planning for divorce (Paul and Mary) agree that the value of the jointly-owned business is $500,000. Mary plans on moving away after the divorce, while Paul wants to continue running the business. Paul will pay Mary $250,000 in cash or other marital property in return for gaining 100% ownership of the property.
Keep in mind that the buy out only works if the buying spouse has enough cash or assets to satisfy the selling spouse. Often, the buy out results in a lump sum settlement, though structured payments may be acceptable as well.
Instead of selling the business after the divorce, a divorcing couple can choose to continue co-owning the business. This situation is not a viable solution in high-conflict divorces, and it will only work when the divorcing couple remain amicable and able to work with one another (and also remain in each other’s vicinity).
Another version of co-ownership occurs when one spouse continues to run the business while the other spouse agrees to accept payments from future business proceeds. This method can be risky, however, especially if the business stops turning a profit in the future.
Sell the Business to a Third Party
When the above-mentioned models don’t work or fit with your circumstances, a third option is to outright sell the business and its interests to a third party. This is perhaps the best way for both spouses to move on and gain some money for a clean start. However, keep in mind that selling a business can take time, and it’s generally advised to not quickly sell the business with the first offer you receive; additionally, if you and your spouse disagree on the value of the business, trying to sell the business could ignite further conflict.
Call the Schultz Family Law Firm in Greater Portland Today!
Divorcing when a business is involved can be a long, expensive, and complex affair with a lot at stake. Fortunately, by contacting Greater Portland ME family law attorney Susan Schultz McEvoy of the Schultz Family Law firm, you can acquire a knowledge, compassionate attorney with a successful record of helping individuals like you.