How To Handle A Business In Divorce
When you own a business and are planning to get divorced in Atlanta, you may be particularly concerned about how your business assets and debts will be handled during the property division process. If your business property is likely to be classified as marital property in any capacity, it will need to be divided according to the rules of equitable distribution. If you want to maintain your business after the divorce, it is critical to seek advice from an Atlanta complex property division lawyer. In the meantime, the following are steps and tips to handle a business in a Georgia divorce.
- Accurately Disclose All Business Assets and Debts
First, all assets and debts—including business assets and debts—will need to be disclosed to the court. It is critical to provide information about all property owned, even if some of it will ultimately be classified as separate property and will not be subject to division.
- Determine Whether the Business Assets and Debts Should Be Classified as Marital or Separate Property
Next, the court will need to determine whether the business assets and debts should be classified as marital or separate property under Georgia law. Separate property will not need to be distributed under Georgia law, but marital property must be divided between the spouses based on what is equitable under the circumstances of the divorce and marriage. Unless a business is expressly omitted from property distribution through an enforceable prenuptial agreement, it is likely that at least some of your business property will be classified as marital property, or has been commingled with marital property. If it is commingled, it will be necessary to try to trace back the source of the assets or debts.
- Trace Back Commingled Property
Any business property that is commingled (i.e., separate and marital in nature) will need to be traced back to determine the amount of marital and separate property held in the business.
- Know Your Options for the Business
Whether you currently run the business with your spouse or you alone have been running the business during your marriage (or doing so with partners or co-owners other than your spouse), you will need to know your options when it comes to keeping the business or potentially selling it (or your ownership interests). If you and your spouse run the business together, it may be possible to continue working together after the divorce. If working together is not possible, you will need to think about whether it makes sense to keep the business, sell it, or liquidate the assets and close it. If you are part of the business with co-owners other than your spouse, you will need to consider whether you can negotiate a settlement agreement to retain your portion of the business property, or whether you will need to be bought out when marital property is divided.
- Consider Reaching an Agreement with Your Spouse
If you want to remain an owner of your business, you should work to reach an agreement with your spouse. The agreement would then be reduced to a settlement agreement, likely detailing that you will give up rights to other marital property in order to retain the business. If your case goes to court, it is possible that the judge will order you to sell your business, depending on the circumstances.
Contact an Atlanta Divorce Attorney
If you have questions about classifying and dividing a business in a divorce, one of our Atlanta divorce lawyers can help. Contact Kaye, Lembeck, Hitt & French today for more information.