Memphis Divorce for Business Owners Lawyers
Attorneys Helping Business Owners Through the Divorce Process in Tennessee
When you and your spouse decide to pursue a divorce, you will be required to address a large number of concerns, including some that are logistical, some that are legal, and some that are financial. Such concerns can be especially complicated if you are a business owner. More likely than not, you will probably want to maintain ownership of your business in the divorce and protect it from problems that could affect the day-to-day operation of the company. With this in mind, it is crucial to understand how business assets are handled during the division of property in a Tennessee divorce.
At the offices of Douglass & Runger, Attorneys at Law, we provide skilled guidance to business owners who are facing the reality of divorce. We work hard to ensure that our clients fully understand the financial considerations that could affect them, as well as the best ways to resolve such concerns. Our lawyers will do everything we can to put you and your business in the best possible position in the wake of your divorce.
Marital Asset Division in Tennessee
Any couple getting divorced must determine how they will divide their marital property. Generally, a business that was acquired or founded during the marriage is considered part of the marital estate, even if just one spouse played an active role in owning or running the business. There may be exceptions, however, for businesses addressed by a valid prenuptial or postnuptial agreement.
It is important to remember that even a business that is considered by Tennessee law to be separate property—such as business interests that were owned prior to the marriage—must also be considered during the divorce. As part of one spouse’s separate property, the business is likely to affect the financial resources available to the spouse who owns it. Each spouse’s available financial resources are important considerations in the division of marital property in Tennessee.
The couple might also need to account for any increase in the value of a non-marital business that occurred during the marriage. For example, if the non-owner spouse agreed to allow the investment of marital funds in the business to finance growth, the owner spouse could be ordered to reimburse the marital funds before the full marital estate is divided.
Dividing Business Assets
Before a business can be considered in a divorce, the value of the business must be determined. There are several methods for doing so, and the right one for your situation will depend on a number of factors. These include the type of business, the current growth projections for the business, and the tentative plan for the business’s future. A strong business that you plan to continue growing, for example, may be valuated using a different method than would a struggling business that you are about ready to sell.
Once the valuation has been completed, you will likely have a few options for moving forward, including:
- Sole Ownership: You might want to continue owning and running your business, but doing so will probably require some concessions to your spouse in return. You could “buy out” your spouse’s share of the business by allowing your spouse to claim a proportionately larger share of the remaining marital property. You could also pay cash out of your separate property or set up an ongoing payment arrangement.
- Joint Ownership: In a situation where you and your spouse have owned and operated the business together, you might decide to continue to do so following your divorce. It is important in cases such as this to develop a clear, enforceable partnership agreement to outline each party’s roles, rights, and responsibilities. You will also need to be certain that you can keep the emotions of your divorce and relationship out of your business decisions.
Selling the Business: Depending on the circumstances, the best option might be for you to sell your business as part of the divorce process. By doing so, you can eliminate conflict regarding the ownership of the business. In addition, the proceeds of the sale can be used to pay down marital debt, and the remainder can be divided between you and your spouse.
Contact a Memphis Business Asset Division Attorney
If you are a business owner facing a divorce, the team at Douglass & Runger, Attorneys at Law, can help you understand the process and how your divorce might affect your company. To learn more, contact our office by calling (901) 388-5805. Our lawyers are here to help you protect yourself and your business.