Nobody wants to enter a marriage contemplating divorce. According to the 2019 American Community Survey from the Census Bureau, the reality is that 14.9 out of every 1,000 marriages end in divorce. That’s a 50-year low, and marriages are now lasting longer than ever. Even so, it’s crucial to understand property laws regarding divorce. It’s especially vital for those who own limited liability companies (LLC). You need to know if and when your company is considered marital property under LLC law.
Here the lawyers at Handin Law everything you need to know.
Marital Property Basics In Florida
When most people think about divorce, we consider the basics like deciding who gets the house, custody issues, and alimony. But, if spouses both own interest in one or more LLCs, marital versus separate property can complicate the entire process.
The general rule in Florida is that property bought by a couple during their marriage will be divided between the parties. Conversely, property purchased separately belongs to the purchaser. There are many decisions to be made during the divorce proceedings. Resolving as many issues as possible in an amicable way saves both money and time.
If an agreement cannot be reached about company division, the matter must go to court and await the judge’s decision.
Dividing An LLC
No matter the size or type of the business, the challenges of deciding ownership remain the same. It’s crucial for couples to consider aspects such as valuation and division to make it easier for your business lawyer to navigate. Without proper planning and understanding, division or ownership may not go fairly.
Here are some things to consider when contemplating and separating a marital property LLC.
Valuation
Deciding how much your LLC is worth is the first step you should take, as it is the most challenging step.
One of the easiest ways to determine this is by hiring a valuation expert. Divorce lawyers recommend that both parties hire their own experts to come to a more complete valuation. Most experts are experienced forensic CPAs, but several organizations provide proper valuation expert certification. These experts will consider several factors, including whether it is a continuing business or is a liquidation value. The real estate lawyers at Handin Law can help you find a valuation expert who works in your favor.
Cost
When determining the business’s valuation, a group of experts carefully comb through all the financial records of your LLC. Smaller companies often have complicated documents due to lackluster bookkeeping or even the combining of business and personal finances and expenses. These issues can make LLC clarity challenging to determine, and the process can last for weeks, months, or even years! If the experts discover problems with the finances, the LLC may face tax issues or risk losing the LLC. Weighing the benefits of a settlement against the cost of the examination is crucial.
Enhancement
Deciding if your LLC is marital property can become complicated even if you owned the company before the marriage. If the LLC became more valuable at any point during the marriage because of the spouse’s efforts – whether through making them an employee or enhancing the LLC with their personal funds – it can be considered marital property.
Your LLC and Handin Law
Determining if your LLC is marital property is not an easy process. Not only does it come with many complications, but there is also no reason to make an already stressful divorce worse. To best decide your situation and weigh your options, it is necessary to hire a business lawyer like Handin Law LLC law experts. Not only can we navigate the ins and outs of your LLC, but we can also find the strategy that works best for you and your company.
If you and your spouse are facing divorce or you have questions about whether or not limited liability law considers your company marital property, contact us online or call Handin Law today at (954)-796-9600!
For more helpful information like this, check out our legal blog and follow Handin Law on Facebook!