Charlotte Divorce Lawyer Blog
What Happens to the Family Business in a North Carolina Divorce?
Divorce can be difficult, but when a couple owns a business, the split-up can make the situation much more complicated. You and your spouse may have worked for years or even decades to develop and grow your family business. With a divorce on the horizon, you need to know what will become of the company. How will the company be divided if you and your spouse end your marriage? A knowledgeable divorce attorney will help guide you through the process.
Distribution of Assets in North Carolina
In North Carolina, marital assets are divided in an equal and equitable manner in divorce. Generally, a family business may be considered marital property if it was purchased during the marriage. There are some questions that you will need to answer to better determine whether all or a portion of the business is marital property. If the business existed prior to the marriage, you will need to know the value at the time of marriage and the current value. This is important if the spouse helped to grow the business. A knowledgeable attorney will help you through this process.
What are the Options for a Family Business in Divorce?
You have several options for how to handle the family business when you divorce. One of the most common choices is for one spouse to buy out the other. This is best when one spouse wants to continue to own and run the business. In this case, the spouse may provide a payment to the other party. The purchase may be made in a one-time full payment or through a payment plan.
Another option is for the judge to award one spouse the equivalent of the business assets they are owed in the form of other marital assets. In some cases, the couple may decide to continue to co-own the business together after they divorce. This can prove to be challenging. In some instances, the couple may need to sell the business and divide the profits or losses. It is important to review several key considerations when making the decision.
Dividing the Family Business Can Be Complex
Dividing a family business can be extremely complicated. You will first need to learn the current value of the business. A business valuation is best accomplished through a reputable professional. You must make sure to know the value of the business when you purchased it, as well as when you separate. It is also critical to calculate which portion of the business is marital property. Even if the business was owned by one party prior to marriage, a portion of any increase in value may be part of marital property. If one or both spouses work in the business, you will need to work out the employment details going forward.
Dividing the family business is not always straightforward. Each situation is unique, so it is helpful to discuss the details with a divorce attorney as soon as possible. Your lawyer will help review the business and assist in proper valuation and distribution. Contact our highly skilled divorce attorneys at Arnold & Smith, PLLC, at (704) 370-2828 to schedule a consultation.
The family law practice group at Arnold & Smith, PLLC includes two Board-Certified Family Law specialists and one Child Welfare Law specialist, as well as several attorneys with many years of family law experience that are committed to providing a powerful voice to individuals facing the often-tumultuous issues in this area of law. The range of issues our family law clients may be facing include pre- and post-nuptial agreements; separation agreements; post-separation support; child support (both temporary and permanent); absolute divorce; divorce from bed and board; military divorce; equitable distribution of assets; child custody (both temporary and permanent); retirement benefits and divorce; alimony and spousal support; adoption; and emancipation. Because this area of the law is usually emotionally charged and complicated, the family law attorneys at Arnold & Smith, PLLC act with the utmost dedication to ensure that each client understands his or her options, and then act to achieve the best result possible for that client’s particular situation.
Source:
https://www.investopedia.com/terms/b/business-valuation.asp
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