When dividing a business that was created during your marriage, you have to allow your emotions to stay at the door instead of letting them overwhelm you. Stress can make you think about altering records, hiding income, or out-and-out lying – but don’t do it. Complicating the divorce with untruths and hidden assets will cause the problem to drag on for longer than necessary and can cost you thousands of dollars. Here are some simple facts about what happens to a business during a divorce.
Is the Business Community Property?
If you created the business during your marriage, it does not necessarily follow that the company is community property. Depending on where the start-up money came from, when the business was created, and how the investment was handled, the company could be outside the purview of the community. Consider talking to a divorce lawyer Orlando FL and a forensic accountant about the impact the ‘community’ had on the business and the value extended from the ‘community’ to the company.
How Can You Value Your Business?
Although you may see your company as a living, breathing machine filled with bodies that walk and talk, your forensic accountant can take an unbiased look at the business as an asset. That means that just like every other asset in your mutual property portfolio, your company needs to be valued and characterized. This valuation and characterization can play a major role in determining how much your spouse receives after the divorce.
What About Double Dipping?
A divorcing partner can not get one-half of the business and spousal support generated from the other half. This is called ‘double dipping.’ This is why a good forensic accountant can be a valuable team member when a business is part of the divorce property division.
Whether your business is separate property or community property is just the beginning of the information needed for this complex issue. Getting insight into how to handle the division of property from your divorce lawyer is only the first step.