When you and your spouse not only share a marriage, but also a business, that may create a very complex situation if you decide to divorce. Understanding your options and choosing wisely as you navigate the divorce process can be essential to the continued growth and well-being of your business.
One couple facing such a scenario was Rodo and Hilda Guevara of Miami-Dade County, whose case was recently ruled upon by the 3d District Court of Appeal. The couple, who co-owned a residential rental property business, had divorced. The Guevaras’ marital settlement agreement stated that they would continue to co-own their rental property in Miami together, but that the husband had an option, available within the first three years, to buy out the wife’s interest for $250,000.
The dispute centered around the wife’s claim that the husband arranged a sham sale of property and that she never got the $250,000 that he owed her. Ultimately, the appeals court concluded that the wife was entitled to proceed with her claim before the trial court that the husband owed her the quarter-million dollars but had not paid it.
While the business interests the Guevaras held were not in the eight- or nine-figure range, their case nevertheless offers a clear reminder of the potential pitfalls that can present themselves to divorcing spouses who are also co-owners of business holdings that are of high value. A divorce among co-owners can lead to several possible impacts on the business’ ownership status. In some circumstances, the couple might choose to continue to own and operate the business together as ex-spouses. This option is usually unlikely to succeed except in those cases where the marriage’s demise was mutually amicable. Alternately, one spouse might choose to keep the business and pay the other spouse to purchase his or her interest in the business. Of course, the couple may also choose to sell the business entirely and divide the proceeds of the sale.
If you and your spouse acquired your business during your marriage, the business is marital property and subject to equitable distribution. Even if you acquired the business before you married your spouse, some or all of the business’ value may count as a marital asset if marital funds or personal efforts were used to grow the business during the time you were married. This may require the court to hear proof and determine a value of the business, and a value of that portion of the business representing a marital asset. This, in turn, could involve detailed discovery and the use of financial experts.
A divorce between two spouses who co-own business assets with substantial value can be a complicated process, involving detailed evidence regarding the business’ worth and the fraction of the business that is marital as opposed to non-marital. When facing a situation like this, it is important to have skilled legal counsel experienced in these matters representing you. The knowledgeable Florida divorce attorneys at Stok Folk + Kon can help you as you pursue a fair split of your assets. Our hardworking attorneys can help you ensure that the equitable distribution outcome in your case properly protects you and your business.
Contact us online or by calling (954) 237-1777 to schedule your consultation.
More blog posts:
Husband Wins New Hearing Regarding $3.5M in Disputed Withdrawals from Marital Accounts, Florida Business Lawyers Blog, March 27, 2015
Antenuptial Agreement Abandoned ‘By Mutual Consent’ Due to Conduct of Spouses, Florida Business Lawyers Blog, March 18, 2015