Helping Men Protect Their Business Through a Divorce
A divorce is not always a simple matter. There will be aspects of your life and circumstances that can contribute to making the process more complex. While your position as a valued member of the Tampa business environment sees you positively contributing to the strength of our community, it also happens to be one of the things that can impact a divorce.
Just as you are a valued entrepreneur, your business is also a valuable asset. When handled incorrectly during a divorce, there is the potential not just for you to financially suffer, but also for there to be unexpected consequences for the operation of your company and the wellbeing of stakeholders. Not to mention that there are often times where male business owners in divorce cases see unfair treatment from Florida judges that tend to be biased in the favor of women.
Just as with any other part of your business, it is vital that you retain the best talent to work on your behalf during your divorce. An experienced divorce attorney can collaborate with you in navigating the most challenging aspects of your case as a business owner. They can use their knowledge and skills to aggressively approach your case in a way that protects your financial health and success of your business. As the well-known divorce lawyers for men in Tampa, FL, In Law We Trust Divorce and Family Lawyers should be your very first call. Since 2014, the law firm of In Law We Trust Divorce and Family Lawyers, has been annually selected by the National Trial Lawyers of America as one of the Top 40 under 40 in Florida which is a professional organization by invitation only, composed of the top trial lawyers from each state or region who are under the age of 40. We’ve also been a featured member of The National Academy of Family Law Attorneys since 2019, as well as included in Super Lawyers each year since 2017. Our firm is renowned for our experience in divorce law and for our successes in helping business owners with their pursuit of a fair arrangement.
The Importance of Establishing Ownership
Understanding who owns the business is the first step in handling a divorce where company assets may need to be considered as part of division. This isn’t always as simple as it might first appear. You may be the sole proprietor of the business, your name is the only one on the licenses and other paperwork, and are the only one in the relationship regularly contributing to its success, and you still might not be considered as the sole owner by the Florida court system.
The most common way this arises is if you started your company after getting married. As with all your other post-marriage belongings, your business is likely to be considered a “community” asset — this means it belongs to both you and your spouse. In this instance, the court is likely to divide an equal share of the value of the business between the two of you.
This doesn’t mean that if you started your business (or your spouse started theirs) prior to the marriage that there is no claim of ownership by the other party. Any aspect of your business that appreciated during your marriage can be taken into account during negotiations to divide assets. This is where the matter can get complex and usually takes into account whether the business naturally grew or whether it was a direct result of your efforts — the latter generally being the basis on which a portion of your business will be considered as joint ownership between you and your spouse. This is why it is so important to team up with a divorce attorney that has some experience of representing business owners.
One important consideration when it comes to establishing business ownership is when your or your spouse’s company is designated as a Limited Liability Company (LLC). Registering in this manner is usually intended to protect the owner and stakeholders from financial liabilities by considering the company and the owner as two separate entities. In some circumstances, this might protect the company’s assets from being considered marital property. However, this may not be the case if the LLC is named as a third party in the divorce.
Understanding How to Value Your Business
Value tends to be the most important factor when handling your divorce. After all, a court is unlikely to suddenly announce both you and your spouse joint owners of your business, forcing you to now work together. Rather, much like your other marital assets, there will be a process of establishing the current value of the business and seek to divide this between the two of you.
This is another reason why it is so important to work closely with your experienced divorce attorney on these matters. There are various ways in which a valuation can be established, and if this is not performed accurately and fairly, not only could you find yourself in financial hardship, but the health of your business could suffer. Your collaboration with your legal professional needs to begin with agreeing on appointing an appraiser and agreeing on a method of valuation that is most appropriate for your business, and then performing a thorough and honest assessment accordingly. Similarly, if it is your spouse who primarily owns and operates a business, you need to collaborate with your attorney to ensure that all relevant assets are accounted for.
Business valuation appraisals during a divorce in Florida usually take the following forms:
The Cost Method
This is the method that is focused on the company’s assets. It involves the appraiser assessing all the elements of the company that represent some financial value and establishing how much it would cost in the current financial climate to obtain these from scratch. Any liabilities the business has is deducted from this amount to reach the value.
The Income Method
This is a fairly common approach to appraising a business, but in some ways can be more complex. In most cases, the appraiser will base the value of the company strictly on its current rate of income. However, it can get more complicated as the appraiser can choose to evaluate the value of the company based on potential future income, too. This can be controversial, too, as it doesn’t always take into account the potential for unexpected disaster.
The Market Method
This is one of the more highly contested forms of assessment, as it is based to a certain extent on the appraiser’s opinion. They will compare the business to others in the industry and geographical area that they feel are comparable. It may be the case that they will review the value of the company by looking at others that have recently been sold. This approach requires close attention from you and your attorney as you might find you need to argue whether the method of appraisal is based on true and accurate comparisons.
In addition to choosing a method, it is common for Florida divorces involving a business to include consideration of the company’s reputation or “goodwill” in the valuation. This is where an assessment is made about what financial amount is placed on a) the owner spouse’s reputation and b) the business’ reputation in the community. Only the business’ reputation is added to the valuation. The owner’s reputation is deducted from the overall value, as this isn’t something that can be considered a marital asset that should be divided.
Taking Actions to Minimize Disruption
One of the big concerns when handling divorce as a business owner is that the process will have a detrimental effect on your company. This is something that you’ve spent years investing your time, energy, and money into and you want to make sure that it remains intact wherever possible. In most cases, it is not the court’s intention to damage the operation of your company. However, it is important that you help them to understand what could be problematic.
By working with an In Law We Trust Divorce and Family Lawyers attorney, you can arrange representations to the court that both minimize any disruption to your business and stakeholders, while also achieving the equitable division of assets that is the ultimate goal of a fair divorce settlement. Many business owners choose to buy out their spouse’s interest, rather than allowing them to maintain what amounts to a controlling interest in the company — though success here can be dependent on how amicable your relationship is.
In most cases, it will involve establishing what proportion of your other joint marital assets or separate property can be provided to your spouse in lieu of giving them a proportion of your company or liquidating the business to provide half the value. Depending on the type of company you’re running, you may be able to arrange stock options or a proportion of future revenue. Your divorce attorney is best positioned to handle these negotiations on your behalf.
Connect with an Business Divorce Lawyer for Men in Tampa
There are various factors of a divorce that can be complex, one of these is how your business will be handled. Having an aggressive lawyer with experience in business matters on hand will help. Call us to begin the representation of you and your assets. We will promptly review the details of the case and provide you with the dependable court representation that you deserve. In Law We Trust Divorce and Family Lawyers is a firm of compassion and expertise in divorce law for men. We will work very hard to help protect your business.