What Happens in a Florida Divorce If I Own a Business?
When you own a business and go through a Florida divorce, property division becomes more involved than simply dividing bank accounts and personal belongings. A business may represent a significant financial asset, provide income for your family, and require careful valuation before it can be addressed in the divorce process. A forensic accountant or financial neutral can establish a fair value, making it easier to divide marital assets while protecting your long-term financial interests.
Step is to Determine if the Business Has Any Value to Divide in a Divorce
The first question in a Florida divorce is if the business has any measurable value. Some businesses exist only on paper and may have little or no income, assets, or business activity.
If the business has no significant value, the resolution is usually straightforward. If the business is owned by one spouse, that spouse will typically keep it.
How Is a Business Valued During Divorce?
When a business generates income or owns valuable assets, determining its value is an important part of Equitable Distribution. Before you and your spouse can decide how the business will be divided, you must know what it is worth.
In some cases, you may both agree on the value of the business. If that happens, the spouse who keeps the business may compensate the other spouse through cash, property, retirement accounts, or other marital assets.
When Do I Need a Forensic Accountant?
If there is a disagreement about value, a forensic accountant may be brought into the case. A forensic accountant specializes in analyzing financial information for legal matters and preparing reports that may be used during negotiations or in court.
The forensic accountant reviews financial records, evaluates assets and liabilities, and determines the value of the business using accepted valuation methods. Their findings will help you, your spouse, and the court to understand the financial picture before any decisions are made.
What Is the Difference Between a Tax Accountant and a Forensic Accountant?
Many people assume all accountants do the same thing. A tax accountant focuses on tax preparation, compliance, and tax planning. A forensic accountant concentrates on financial analysis related to legal disputes. In a divorce that involves a business, the forensic accountant evaluates business interests, prepares financial reports, and provides information that may be used to support property division decisions.
What Happens If Each Spouse Hires Their Own Expert?
In some divorce cases, you and your spouse may each hire separate forensic accountants. Both experts may agree on straightforward financial information, but they may reach different conclusions regarding the value of the business.
When competing valuations are presented, the court will determine which valuation method is more appropriate. This process will increase both the cost and length of the divorce because two experts are reviewing the same financial information.
Can You Use One Joint Forensic Accountant?
You and your spouse may agree to hire a single neutral forensic accountant. The accountant works independently and provides one valuation for both sides to use during negotiations or in litigation.
How Are Business Interests Addressed in Collaborative Divorce?
In a Collaborative Divorce, financial issues are reviewed by a financial neutral. Unlike an expert hired by one side, the financial neutral works with the entire Collaborative Divorce team to evaluate assets, debts, income, and business interests.
The financial neutral gathers information, analyzes financial data, and presents options for dividing assets in a way that addresses the goals and priorities of you and your spouse. This process encourages productive discussions and creates solutions that are tailored to your family’s circumstances.
Why Business Valuation Matters
When a business is part of a Florida divorce, determining its value is one of the most important financial decisions you will make. The value assigned to the business may affect property division, retirement accounts, support considerations, and your overall financial future.
Contact Earl Harmon
If you own a business and are considering divorce, Attorney Earl Harmon can help you understand how to value your business and address it during the divorce process. Call (352) 973-9699 or click here to schedule a consultation.
Our office is located at 999 Douglas Ave., Suite 3325, Altamonte Springs, FL 32714.
FAQs
Is a business considered marital property in a Florida divorce?
A business may be considered marital property if it was started, acquired, or grew in value during the marriage. The specific facts of your case will determine whether all or part of the business is subject to Equitable Distribution.
Do we need a forensic accountant to value a business?
Not always. If you and your spouse agree on the value of the business, a formal valuation may not be necessary. When there is a disagreement, a forensic accountant may be needed to provide an independent analysis.
Can one spouse keep the business after the divorce?
Yes. In many cases, one spouse keeps the business and compensates the other spouse for their share of its value through cash or other marital assets.
Earl obtained a Bachelor of Arts degree in English Literature from the University of Central Florida. He focused his studies mainly on women writers of color while also engaging in the writings of many prominent Americans. Earl then earned a law degree from Thomas M. Cooley Law School where he graduated cum laude with a Juris Doctorate. While attending law school, Earl served as treasurer of the Straight and Gay Alliance. He furthered his studies of American writers by studying those that wrote about the history of the law.
Also, Earl studied compliance law learning about the ways to keep organizations in compliance with the regulations that they operate under.
