Marriage and business have at least one thing in common: both are filled with ups and downs. When the roller coaster can no longer be endured, it is time to get off the ride.
If you have business assets, you may be concerned about how divorce will affect your business.
Let’s get down to business with this short guide on divorcing with business assets and debt.
The division of assets and debts in divorce must be approved by a judge in order to be formalized and legally binding. The formal approval of a judge does not require you to go to court. Like custody, the division of business assets in divorce may be mutually and privately agreed upon through mediation, which the mediator will then submit to the judge for formal and binding approval.
If you do not choose mediation or cannot arrive at an agreement with your future ex, a court hearing will then be necessary for the judge to intervene and decide on behalf of you both.
It is usually more favorable for both parties to first arrive at a mutual agreement, as disagreeing and ending up in court may cost you both significantly more time and money. You may be ordered into a division that does not accommodate your needs nor align your mutual best interests.
Community And Separate Property
It is important to understand the legal terms of divorce and property law in your state and make informed decisions as you negotiate the terms of divorce agreement.
California divorce laws consider property to generally be in either of two categories: community and separate.
Community property includes: anything you earned while married; anything you bought with the income you earned while married; any debt you incurred while married. Separate property is what you each own or owe individually from before you married or after you separated, and any gifts or inheritance received.
A judge will order that each individual keeps their own separate property and that community property be divided equally.
Business Considerations In Divorce: Valuation, Assets, And Taxes
McNamee Mediations offers expert consultations to identify and accurately assess the fair market value of a business as part of the marital assets, including real property, capital, inventory, goodwill, intellectual property, debts, and future earnings. We are equipped with the resources and expertise to prepare and analyze financial statements and other documentation required to provide a comprehensive picture of the business’s financial health.
Our Asset Division Framework provides guidance on creating a plan for the mutually agreeable division of business assets, whether it is through selling the business, one partner buying out the other, or continuing as co-owners post-divorce.
Furthermore, we help clients understand the tax implications of various asset division options, aiming to minimize liabilities and ensure financial sustainability for both parties.
Divorce Mediation For Business
If you are the non-owner spouse in your marriage, you may have concerns about your rights. McNamee Mediations gives special attention to protecting the financial interests of a spouse who may not have been directly engaged in the business but has a legitimate claim to a share in its value, given their contributions through labor, emotional support, or financial assistance.
The history and intricacies of every business are as unique and complex as every marriage. Mediation facilitates an open and collaborative discussion giving each party the opportunity to express their needs and concerns. Mediation is flexible and compassionate, whereas litigation can be more a rigid and potentially hostile process that is less forgiving and less accommodating to each person.
McNamee Mediations uses proven conflict resolution techniques to resolve disagreements about the business, including its value, operation, or future direction. We ensure that all discussions and documents related to the business are kept confidential, safeguarding sensitive information and financial data from public record and maintaining the integrity and reputation of the business throughout the divorce process. Divorce mediation is entirely confidential; the information that is exchanged during mediation is generally not admissible in court.
We thoroughly review prenuptial and postnuptial agreements that pertain to the business and ensure that the drafting of buy-sell agreements are fair, transparent, and legally sound.
If you have any questions about our mediation services, give McNamee Mediations a call today to discuss divorcing with a business.
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