Dividing a business in a Florida divorce can be complex. It involves considering both assets and ongoing income. Some businesses may hold sentimental value to spouses, which makes the division harder to bear.
Fortunately, there is no one set way to divide a business in a Florida divorce. If the circumstances of a case permits, both parties may secure a favorable outcome of their business division.
Here are three common ways to handle a business during divorce proceedings:
One buying the other out
One method is for one spouse to buy out the other’s interest in the business. This option allows one spouse to retain full control of the business, while the other receives compensation for their share. This can be done by paying a lump sum or through an installment plan. Before anything else, the parties or the court will have a professional appraise the value of the business, the same process as to house buyouts, to ensure a fair buyout price.
Both sells the business and split the money
The parties may decide to sell the business and split the proceeds. This option is simpler in terms of separating assets, but it might not be favorable if the business is particularly successful or if market conditions are not ideal for selling. With this method, both parties need to agree on the terms of the sale and how to divide the proceeds.
Both agrees on co-ownership
Some ex-spouses choose to continue jointly owing the business post-divorce. This requires a certain level of cooperation and trust, so it is not suitable for everyone. If the parties choose this option, it is important for them to clearly define roles, responsibilities and profit-sharing in a formal agreement to prevent future conflicts.
In all cases, it is advisable to consult with a legal professional experienced in asset division to navigate the complexities of business valuation, tax implications and legal requirements. Each approach has its pros and cons, and the right choice depends on the specific circumstances of the business and the relationship between the divorcing parties.