How Will Divorce Affect Your Family Business?

One of the important issues in an Ohio divorce case is property division, and it is a topic that almost all parties will need to address. The state follows the law of equitable distribution, in which the couple’s marital assets are divided according to the interests of fairness. Property division is straightforward with some items, but a family business complicates matters significantly. The nature of the property as marital, the goals of the parties, and division of other assets and debts are important factors.

Fortunately, the parties do have some control over how divorce affects your family business. There are property division options other than court, and they deliver significant benefits. Still, the most important aspect of divorce is protecting your rights and interests, so it is wise to retain a North Canton property division lawyer for legal help. A few points should also help you understand what happens with a family business.

Important Factors About the Business

Ohio’s process with property division starts with determining whether an asset is marital or separate, and another analysis is value. Three questions are important:

• When was the business acquired or founded? Assets that are owed by a spouse before the marriage are typically separate property.
• Did the company value increase during the course of the marriage? If so, the increase in value could be considered a marital asset, even if the business began before the parties married.
• Did the non-owning spouse contribute significantly to operating the business after getting married? This also makes the case for a portion of its value being marital asset.

Future of the Company

Another practical consideration with a business is what the spouses intend for its future, if the entity is considered a marital asset. Rarely will they both continue to operate it together after divorce, but one may want to keep the company going. It will be necessary to conduct a business valuation, which is a comprehensive assessment of the company’s net worth, including the value of goodwill. These factors are important for looking at the future of the business in the context of divorce.

Options for Family Businesses

Once you have a business valuation, you can frame the conversation for settlement negotiations. It is wise to consider working out an agreement that protects you and the business, since contested hearings are time-consuming and uncertain. Some options for a family business in divorce include:

• A party buys out the other, usually by giving up other assets;
• The spouses sell to a third party; or,
• The parties operate the business as partners.

Talk to a North Canton Property Division Attorney About Details 

If you have concerns about how to address a family business in Ohio divorce, it is important to reach out for legal help right away. You can trust our team at Fout Law Office, LLC to pursue all options, and we are dedicated to protecting your rights throughout the process. Please contact our offices in North Canton today to schedule a consultation with an Ohio property division lawyer.