Divorce brings about a multitude of emotional and financial challenges For entrepreneurs and business owners, there’s an added concern – protecting your business assets. In Florida, like most states, businesses can be considered marital property subject to division in a divorce if they were started during the term of the marriage. So, how can you protect your business during a divorce? At RTRLAW, our family law attorneys have the experience and knowledge to guide you through this complex process.

Understand the Marital Property Laws in Florida

Florida is an “equitable distribution” state. This means the court aims to divide marital assets and debts equitably, though not necessarily equally, between divorcing parties. The key is understanding what constitutes marital property. Typically, any assets (including businesses) acquired or grown during the marriage can be classified as marital property. Even businesses established before the marriage may be at risk. For example, if a business that was established or acquired by one spouse before the marriage increased in value during the marriage, the court could identify a marital appreciation portion of the business to account for the growth of the business during the marriage. Thus, your spouse may have a right to that amount of the appreciation portion.

Get a Business Valuation

An accurate business valuation is crucial in protecting your business in a divorce. A professional business valuation can provide an objective assessment of the company’s worth, taking into account factors like market conditions, company assets, liabilities, and future earning potential. A proper valuation can ensure you are not overpaying your spouse for their share of the business.

Establish a Prenuptial or Postnuptial Agreement

A prenuptial agreement established before marriage, or a postnuptial agreement set during the marriage, can be invaluable in protecting your business. These legal documents can stipulate that the business is to be considered separate property, not subject to division in a divorce. Alternatively, they can specify how the business will be valued and divided in a divorce. However, for these agreements to be valid and enforceable, they must meet specific legal requirements, such as both parties must be truthful regarding their assets and they must fully disclose their assets and finances. If one spouse fails to disclose all or part of their assets or coerces the other party into signing the agreement, it could be grounds for dismissing the agreement. To make sure your prenuptial agreement meets all legal requirements, it’s essential to consult with an experienced family law attorney.

Consider Buy-Sell Agreements

If your business has multiple owners, a buy-sell agreement can provide protection. This agreement can limit a divorcing spouse’s ability to acquire ownership interest. Typically, it includes a provision that outlines how a divorcing spouse’s interest will be bought out by the other business owners or the business entity itself.

Maintain Clear Boundaries Between Business and Personal Assets

Blurring the lines between business and personal assets can make it harder to argue that your business should be treated as separate property. Avoid using business assets for personal expenses and try to limit your spouse’s involvement in the business. The more independent your business is from your marital assets, the stronger your argument will be for it to be considered separate property.

Start Strategic Planning with RTRLAW’s Experienced Attorneys Right Away

While the steps above can provide significant protection for your business, the best action plan will depend on your individual circumstances. The experienced family law attorneys at RTRLAW can advise you throughout this complex process and work with you to develop a strategy to protect your business in a divorce.

Divorce doesn’t have to mean the end of your business. With careful planning and legal guidance, you can navigate the process while safeguarding your business and your financial future. Contact RTRLAW today at [email protected] or call or text us toll free at 1-833-HIRE-RTR (1-833-447-3787) for a no-obligation case review to explore your options and find out how RTRLAW can assist you.

Remember, the journey ahead may seem daunting, but with the right support and guidance, you can protect your hard-earned business and look forward to a brighter future.