Understanding the Division of Business Assets in Florida Divorce Proceedings
Florida is a state with a vibrant economy and a multitude of businesses ranging from small family-owned shops to large corporations. When couples who own businesses decide to divorce, the division of business assets can become one of the most complex and contentious aspects of their proceedings. In Florida, the distribution of these assets is governed by the principle of equitable distribution, which aims to divide marital property fairly, though not necessarily equally.
Equitable Distribution and Business Assets
In the context of divorce, Florida Statute 61.075 mandates an equitable distribution of marital assets and liabilities. Unlike community property states, where assets are typically split 50/50, Florida courts have more discretion to decide what is equitable based on a series of factors.
For a business that was started or acquired during the marriage, it is usually considered a marital asset and subject to division. If one party owned the business prior to marriage, it could be considered separate property; however, any increase in value during the marriage might be subject to division.
Valuation of Business Assets
Valuing a business accurately is crucial for equitable distribution. This often requires hiring professional appraisers or financial experts who can assess not just the tangible assets of the business but also its intangible assets such as goodwill, brand recognition, and intellectual property.
One historical reference that highlights the complexity of this issue is the case of Perlmutter v. Perlmutter, which took place in Florida in 1987. In this case, the court had to determine how to equitably distribute stock options in a corporation as part of a divorce settlement.
Factors Influencing Division
The court will consider various factors when deciding how to distribute business assets:
- The contribution of each spouse to the business
- The economic circumstances of each spouse
- The duration of the marriage
- The sacrifices one spouse might have made for the other's career or for the wellbeing of the family
- Any previous agreements between spouses regarding asset distribution
Based on these factors, a judge may award one spouse a larger share of the business or offer other marital assets in lieu of a direct share.
Buyouts and Continued Co-Ownership
In some cases, one spouse may buy out the other’s interest in the business. This can be done with cash, by trading off other assets, or through a structured settlement over time.
Alternatively, divorcing spouses might agree to continue co-owning and operating the business post-divorce. This arrangement requires a high level of trust and cooperation and is less common due to its potential for ongoing conflict.
The division of business assets in a Florida divorce requires careful consideration and skilled legal guidance. Parties involved should prepare for detailed financial scrutiny and be willing to negotiate to reach an amicable agreement. With thorough preparation and expert assistance, couples can navigate this process effectively, ensuring that both parties receive their equitable share without causing unnecessary harm to the business itself.