Equitable distribution is part of the divorce process in North and South Carolina. Dividing a business can be one of the more challenging aspects of dividing up your finances for several reasons.
Is the Business Marital Property?
A spouse may have started the business prior to marriage and never used marital funds in the business. In this case, the business would be entirely separate property and not subject to equitable division.
However, if marital funds were used as an investment in the business, or if both spouses contributed labor to the business, then it is likely that at some of the business interests will be joint property subject to division.
How Much is the Business Worth?
Valuing a business is a complex task. It’s not like savings accounts or even a home that can be valued by comparing it to other homes.
There are several ways to value a business. If the business interest at stake is fairly small, the spouses may be able to agree to a number without much effort.
Larger business interests may require valuation experts, and there is a higher chance of disputes. Each spouse may have their own independent appraiser give an opinion about the value of the business. This process will generally make the divorce for expensive for both spouses but may be necessary if there is a valuable business interest at stake.
What Other Assets Are Available?
Ideally, the entrepreneur spouse could simply pay the other spouse an amount equal to the portion of the business interest they are entitled to. This would allow the business to continue to operate without selling off assets or depleting cash reserves.
Other assets can also be given to offset the business interest being sacrificed. The marital home, cars, or other valuable property may be given to a spouse in exchange for giving up their business interest.
As an entrepreneur, your divorce is going to have a big impact on your financial situation, and you need to be prepared for these changes. You may also be responsible for paying spousal support and/or child support.
Every divorce case is unique, so contact a divorce attorney to discuss your specific facts and circumstances.
At King Law Offices, we understand the challenges involved in any family law matter. Our goal is to help guide you through this process and listen to your concerns. Come visit us at one of our multiple office locations throughout North and South Carolina.