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Concerns for business owners during divorce

On Behalf of | Jun 13, 2019 | Family Law

The financial effects of divorce can last long after most of the emotional and practical issues surrounding the end of a marriage have been resolved. This is especially true for business owners in Georgia, who often have unique concerns about how to protect their companies. In many cases, the family business is the marital asset with the highest value, even outstripping other items like the marital home, investment accounts or retirement funds. Therefore, negotiating a solution on property division is often based on resolving key questions about the business and its future.

One of the most important steps that people can take is obtaining an accurate valuation of the business. While there are several accepted ways to determine the value of a company, they all begin with an examination of financial statements. However, in more contentious divorces, spouses may be concerned that the other spouse is hiding assets inside the business. Therefore, each spouse may want to obtain an independent expert to produce a valuation, using in-person reviews and walkthroughs to determine the extent of business assets.

How much of the business is subject to property division in the divorce often depends on when the firm was founded. If one spouse owned the business before the marriage, it may be that only the increase in value is considered marital property. On the other hand, if the company was formed after the spouses were already married, it is much more likely to be considered a marital asset in total.

There are a number of issues that can arise for both spouses when a successful small business is a key part of the marital assets. By working with a family law attorney, a divorcing spouse may receive representation to work toward a fair settlement on property division, spousal support and other matters.

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