The Effect of Divorce on Family Businesses in North Carolina
Family businesses or professional practices can suffer dearly in divorces, unless the spouses and their lawyers negotiate carefully to consider the effect of property division plans on the fate of the family business. In most situations, each spouse will have a “marital interest” in the family business or professional practice. But that does not mean that the divorcing spouses will both continue to be owners of the business. After completing several levels of evaluation and analysis, your divorce attorney will propose different property division agreements that serve the unique needs of your family and your business. If you or your spouse owns a family business, don’t finalize a divorce without an asset protection analysis by an experienced marital property division lawyer.
Our family law practice is led by a North Carolina Board Certified Family Law Specialist who also holds a master’s degree in business administration and practical experience as a business owner. If you or your spouse owns a business or a professional practice, and you have questions about business valuation or the distribution of the value of a family business during a divorce, schedule a consultation by calling 336-790-0165 or 877-509-6616.
Family Businesses and Divorce: Valuation, Division and Restructuring
The resources necessary to conduct in-depth analysis of the various legal and commercial options in a divorce where a family business is at stake.
There are several questions that must be answered during a marital property settlement negotiation when a family business is involved:
- Who started the family business? Was the business in existence before the marriage began?
- If the business existed when the marriage began, what was the value of the business at that time, and what is its value today? Did the non-owning spouse help run or grow the business? If so, the non-owning spouse may be entitled to a share of any increase in value?
- Did the business, in fact, increase in value?
- If the spouses started the business together, what is the value of the business today and what is the most equitable way for one spouse to be compensated for giving up ownership interest?
- Must any of the following business agreements be rewritten to reflect any changes in ownership interests: purchase/sale agreements, partnership agreements, operating agreements or shareholder agreements?
- Are any stock transactions necessary?
Family businesses are very important to the families that run them. The business may be important because it serves as one spouse’s sole income source. Or, it may be valuable because it has been a family-owned business for several generations. At Greensboro Family Law, we take special care negotiating marital property settlement agreements when family businesses are at stake. We recognize the value these businesses have and how important it is that they continue to thrive after a divorce is finalized.
Contact Greensboro Family Law in Greensboro, North Carolina
If you are contemplating divorce and your marital estate includes a family business or professional practice, seek early legal counsel. Take the time to think strategically about how to untangle ownership interests without doing unnecessary harm to the business.
To schedule a consultation with Rebecca Perry, call 336-790-0165 or toll free at 877-509-6616, or contact us online.