If you’ve spent a good part of your adult life developing a business, you want to be able to keep the business after a divorce. Whether it’s a professional business, a commercial business, or a nonprofit; a business is more than just a valuable asset. A restaurant, retail business, accounting firm, or other business provides an income and a purpose to your life.
That income is necessary to support yourself. If you have children, both parents should appreciate that a viable business helps pay for child support for the children. The business may even pay for alimony.
At Taylor Jones Taylor, we help spouses keep their business in the event a marriage is over. Some of the initial business asset features we review:
- Identifying the type of business you have. Many people own their own business. Some spouses have a partnership agreement with other business partners or a limited liability corporation.
- Determining how much income the business provides you. Generally, this is the net profit from the business and/or any wages you receive for managing or working for the business.
- Placing a value on the business. This is often the most contested part of a divorce case. The spouse who owns the business wants to place a low value on the business while the other spouse wants to place a high value on the business. There are different methods used to value a business depending on the nature of the business. We work with you and financial professionals to determine the correct worth of your business.
What strategies do family law attorneys use to help a client keep the business?
In Mississippi, the first step in dividing property is to fully identify which property is marital property. Marital property typically includes all assets acquired during the marriage such as a home, vehicles, bank accounts, retirement accounts, personal possessions, and the business interests of each spouse.
The second step is to determine what the equitable distribution should be. While the starting point is normally a 50-50 split, the percentage of property each spouse keeps can change depending on a variety of factors. Some of these factors include:
- The contributions each spouse made to accumulating the property – including financial contributions, family stability contributions, and the help a spouse gives a wage earning spouse by enabling the wage earner to earn a degree or proper training.
- The needs of each spouse
- The need for alimony if the property is divided equitably
- The value of each spouse’s estate apart from the marital property
- Other factors such as tax consequences
Once a determination is made as to which property should be divided and how much each spouse should get, skilled Mississippi lawyers work to craft a settlement so that you keep your business instead of having to sell it.
In most cases, we work to negotiate trade-offs. This means in order to keep your business, you need to buy out your spouse’s interest in the business by giving up your equal interest in your spouse’s property. This can be done in a couple ways:
- When both spouses have a business that has the same value, each spouse keeps their own business and equitably divides the other property.
- You keep your business in return for giving up some or all of you interest in in the marital home and/or other assets.
If trade-offs are not possible, we may help you keep your business by arranging a buy-out over time of your spouse’s interest.
If you own your business before you get married make sure to have a prenuptial agreement in place that outlines how the business will be divided or sold. You could also draft a partnership agreement or LLC agreement which helps protect your interests and those of your partners. For example, the partners or shareholders could be given the right to buy out the divorcing spouse’s interest.
As with all marital property, each spouse needs to prioritize the assets they wish to keep as opposed to the ones they’re willing to sell.
In most cases, your spouse doesn’t want to be involved in your business. He/she just wants to be compensated in cash or in kind. If your spouse is also involved in the business, resolving business protection issues becomes more complex.
At Taylor Jones Taylor, our Southaven equitable division lawyers have been helping spouses reach strong financial agreements – so they divorce so they can move forward with the lives and have the income they need to support themselves and their children. Many divorces are resolved through negotiation and/or mediation. Our family lawyers provide trusted advice to clients in Olive Branch, Southaven, Hernando, and other areas throughout Mississippi. To discuss your divorce rights, including the right to keep your business, call us today at 662.342.1300 or complete our contact form.
Benjamin L. Taylor is a lifelong resident of DeSoto County and has distinguished himself in the area of products liability and personal injury law. He has a reputation as a fierce advocate for his clients and has obtained millions of dollars in verdicts and settlements over his career. He has been listed in the publication Super Lawyers of the Mid-South in the area of product liability. To learn more about Mr. Taylor, please refer to his biography page.
