One thing that can make an Ohio divorce more complicated is division of a family business. During a divorce, you will need to divide all your marital assets, which generally include all the property you and your spouse acquired during the time you were married. The process of dividing those assets will adhere to Ohio’s laws of equitable distribution. This means the property will be divided between the spouses fairly but not necessarily equally. Non-marital assets, however, will not be subject to division.
There are only a few circumstances in which a family business will be considered non-marital property. Even when a business was created or acquired before the marriage, the business will very likely be considered a marital asset under Ohio Law if you supported the marriage with income from the business, comingled business finances with marital finances, or made your spouse part of the business. In addition, any improvements or enhancements you made to the business during your marriage will likely be marital property.
After understanding that your business will be divided in your divorce, you need to figure out how to go about dividing it. The first step in this process will be determining the value of the business. You will want to hire a special expert to perform the valuation — usually someone called a forensic certified public accountant (CPA). The CPA will look at a number of aspects of your business to arrive at a value, including:
- The size of your business;
- The type of business it is or kind of work it does;
- The financial and accounting records of the business;
- Any property owned in the business’ name;
- The reputation and goodwill of the business.
When you arrive at a final dollar figure, you have a few options for dividing the business with your spouse:
- Liquidate the business and split the money;
- Allow one spouse to maintain full ownership of the business with offsets to the other spouse (either money or property); or
- Create an agreement wherein both spouses maintain a certain percentage of ownership in the business.
If you and your spouse cannot come to a voluntary and independent agreement as to what to do with the business, the court overseeing your divorce can make a determination for you. The court will look at all the circumstances of your marriage, including other property and assets going to each spouse and the tax implications of every option, and will decide the best way to handle division of your family business.
If you are considering or beginning a divorce in Ohio, it is important to work with an experienced divorce lawyer to understand how the proceedings can affect your family business. Dawes Legal, LLC, can help you navigate this process to ensure your interests are protected. Schedule a consultation with Dawes Legal, LLC, today by calling (614) 733-9999.