When business owners divorce, property division matters can become very complex. In North Carolina, marital assets, including businesses and professional practices, are to be divided in an equitable manner upon divorce. Identifying, valuing and distributing such assets is often the subject of complex negotiation and litigation.
Some of the unique challenges accompanying the division of business assets in divorce include:
- Valuing the business: There are many factors that influence a business's value, including its earning capacity, economic outlook, the value of its stocks, and its "goodwill" or reputation in the community. An experienced divorce lawyer can protect your interests in the valuation of a business. It may be necessary to call upon experts in accounting, business valuation, appraisal and other fields to obtain a fair and accurate assessment.
- Determining what is separate property and what is martial: If the business was established during the marriage, the assets are generally considered marital property and subject to division upon divorce. The situation becomes more complex if the business was established prior to marriage. Assets and property acquired before marriage are separate property, but any increase in the business's value occurring after marriage may be considered marital property. Only after a thorough evaluation of the business's history and growth can an accurate assessment be obtained.
- Deciding who keeps the business: If the spouses ran the business together, it is unlikely they will wish to remain business partners after divorce (although this arrangement is not unheard of). It is more likely that one spouse will keep the business and the other will be compensated with other marital property.
Whether you run the business or your spouse does, it is important to protect your rights and financial interest in divorce. Consult with a divorce attorney who is experienced in complex, high-asset divorces before signing anything or making any important decisions.