Divorces are challenging, and the more complicated and intertwined the couple’s financial life is, the more difficult it can be to come to a fair settlement where both parties to the divorce feel the division of property and assets is equitable. Often a 50/50 split is not equitable, as there can be various aspects of their life together that impacts that final amount.
When a couple has limited assets, savings, investments, 401K plans, retirement plans, and other types of sources of income, division of the property is often relatively simple and straightforward. The greater the value and the number of assets are for the couple, the more difficult it can be to create a mutually acceptable settlement out of court. However, in any divorce, there may be disagreements about items and property that has limited monetary value, but very high sentimental value. These items are often impossible to fairly divide, and a give and take on items is required if settlement is to occur.
If the couple cannot resolve the division of property conflicts in negotiation or mediation, it goes forward to the court where the judge makes the decision. Ideally, if the couple can agree upon a settlement before court, both can have input into the best way to divide assets and liabilities, providing the best short and long-term outcome of all involved.
Businesses and Divorce
For those going through a divorce that own a business, knowing how to value the business as an asset in the divorce is a challenge. Your family attorney should recommend a business valuation, which provides an objective, third-party report on the value of your business based on a standard valuation model.
If the business was started during the marriage, or if the couple are joint owners, a 50/50 split of the current value may be an option to consider. This typically means buying out the other person, which may mean liquidating assets or taking out a loan.
If the business was operating before the marriage, the business owner may be able to make a case for less than 50% of the value to go to the spouse. In these cases, negotiation is often critical in determining the dollar value of the other spouse’s settlement from the business.
Hiding Assets – Out of Sight, Out of Mind
With both a business as well as community property assets, it is not uncommon for one spouse to have more personal knowledge or even control of these assets. When this is the situation, the spouse with control over the assets may hide or fail to disclose the asset, which leaves them out of the settlement.
When a spouse believes assets are hidden or not being disclosed in the divorce, working closely with an experienced family lawyer helps to uncover this attempt to hide property or items of value.
Putting aside the emotional pain of a divorce to develop a settlement that addresses both monetary and sentimental value items is difficult, but it provides the most effective, personalized solution for the individuals moving forward in their lives. At Keller Legal Services, our Wheaton divorce lawyers have the skills and experience needed to handle assets division of your business while through divorce.