Nearly 50% of marriages end in divorce these days, and distributing assets and funds can be complicated. The process is even more challenging if one or both spouses own a business. If you live in Florida and are facing divorce, here are some essential factors to keep in mind.
The financial impacts of divorce
Getting a divorce can be a stressful financial ordeal. Even if your divorce is uncontested, there may still be a claim on all property and assets in your name. This is for the purpose of determining marital property, which is defined as all assets and income that you or your spouse acquired during your marriage.
Equal distribution and community property
When it comes to your business, there are nine states that are considered community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. If you live in one of these states, your business will be split 50/50 if you get a divorce.
The remaining states are equitable distribution states. In these areas, the courts will determine who receives assets and property following the dissolution of a marriage. It can take months or even years to determine what each spouse is entitled to, especially if the divorcing couple cannot come to an agreement on how to divide marital property.
Divorce can be financially and emotionally draining. If you’re running a business, it’s natural for your focus to shift while you’re trying to work through your divorce. However, this could put your business in jeopardy. If you’re a stakeholder in the company and your ex gets a significant portion of your stock in the divorce settlement, they could become an unwelcome business partner.
Dividing ownership of your business with an ex could be harmful for your company in the long run. You may want to seek alternative solutions, such as offering your ex an asset of equal value in order to keep the business for yourself.