The valuation of a business in a Shepherdsville or Bullitt County divorce is one of the crucial elements of property division. This is true if you are the owner of the company, or the spouse of a business owner or licensed professional. Why is the valuation of the business going to have such an impact on these cases?
The first question regarding a business asset in divorce is whether the asset is marital property, the separate property of the business owner, or a blend of the two. Separate property is primarily characterized as any asset or debt obtained by one of the spouses prior to the date of marriage or after the date of separation. Separate property is not subject to property division in a Kentucky divorce.
If the company was obtained after the date of the marriage, or if marital funds or labor were used to support the business, the asset will be considered to be a marital asset in whole or in part. Marital assets are to be equitably divided between the parties under Kentucky Family law. This is why the valuation of a business in a divorce is such an important issue.
Usually, the business owner wants to keep their business after the divorce. If the business is a marital asset or “commingled” asset (where marital funds or labor were used to support the company), the business owner must “offset” their spouse’s marital interest in the business during property division in order to keep that company after the divorce is completed. This is where valuation becomes so important.
The business owner wants the valuation to be as low as possible. If the company is worth a lesser amount then the marital interest in the company will be lower. A lower valuation means there is less of a marital interest in the business for the owner to offset in order to keep the company. The spouse of a business owner or professional in practice usually has the opposite interest. The higher the valuation, the more the business owner will need to pay that spouse in property division in order to keep the company after the divorce is completed.
My name is John Schmidt, and after more than 25 years of family law practice I can tell you any divorce with a business or professional practice requires an experienced divorce attorney. This is also true when there are substantial retirement or pension accounts. Many people forget their 401(k) or teacher’s retirement are subject to property division in a divorce as well. This is why it is important to work with the Law Offices of John Schmidt & Associates, PLLC if you are seeking a divorce in Shepherdsville, Bullitt County or the surrounding communities and counties.
The valuation of a business in a divorce is only one of the important issues you will face. We invite you to contact us via e-mail, schedule an appointment or call us today at (502) 509-1490 to get answers to your questions and to learn more about your unique circumstances and how to protect what is most important to you in your family law case.