Dividing Family Business Louisville Divorce
I have the privilege of representing entrepreneurs who are going through a divorce. One of the most important questions to tackle is “What will happen to my business because of the Divorce?”.
Your family business is an asset for Louisville Family Court to address just as Family Court must do with your home and savings. However, small businesses are assets that require some special knowledge and experience to address.
The basic rules are the same for every asset. Louisville Family Court will consider the business an asset to equitably divide between the parties to the marriage in just proportions considering the contribution made to acquisition of the business. However, if the business was started before the marriage or with funds from a nonmarital source, then the Judge will restore some or all of the business to the nonmarital contributor.
The value of the marital small business and how it is divided between divorcing spouses is the portion of my Louisville Divorce practice which requires special knowledge and experience. It is crucial to secure an expert in forensic accounting and valuation who can guide you to the best way to explain to and value the business for Louisville Family Court. The type of business is the first key factor. If you have a professional practice, like mine, some part of the value is not divisible which is known as “personal goodwill”. “Personal Goodwill” is the likelihood that people will hire me to perform professional services for them in the future.
The assets of the business must be inventoried. Once inventoried, the assets may be appraised. If the inventory is what the business sells, then that may make up the bulk of the value of the family business.
Finally, the appraiser of the business will sometimes talk about a discount from the value of the business for a variety of factors. If you are in a marriage where one partner worked in the business and one made other contributions, then discounting factors may become the most important part of the conversation. It is important to have knowledgeable counsel who will help you tackle that thorny subject.
If your family business is about to go through a divorce, the first step is to contact me. The second step is to begin to gather up as much of the documentation for that business as you can. We will work together to help you protect your entrepreneurial enterprise as you go through a difficult time.
If you have questions about your family business, whether you are the owner/operator or not, I will always be happy to talk to you. Just give me a call. Also, please feel free to learn more at jrlloydlaw.com or thelouisvilledivorceattorney.com or thelouisvilledivorcelawyer.com if you are not ready to talk. Thanks for reading.