When a couple gets divorced, they divide their assets. An important question in any Kentucky divorce is what assets are considered marital property. Generally, this includes any asset that comes to the parties because of the marriage. Marital assets may include ownership of a business.
When one or both parties have a business, it needs to be included in the marital estate. Even if only one spouse works in the business, both spouses may have a right to a share of the business as part of the marital estate. Similarly, even if only one spouse is listed on ownership documents, as long as the business operates and accrues value during the marriage, the business is subject to division in most cases.
For many business owners, the most relevant question becomes how to divide the business. It may not be as simple as looking at accounting records and dividing annual incomes in two. Valuing a business can be a complex matter in family law cases. In addition, there is the added challenge of determining how to compensate the spouse who is divested of their business interests. The business may not have the liquidity to simply write a check. However, there are options, including offsets of other property, payments over time and other ways to compensate a spouse for their release of an ownership interest.
Valuing a business can be a difficult task in any divorce. However, for some couples, the division of the business is a critically important issue. A family law attorney can help a client gather the evidence to prove the value of the business. They could draft transfer papers and help the client develop a strategy for protecting business interests before, during and after a divorce.