How do we split the business? Will I have to continue the business with my spouse?

Click here to view this article in video format.

My name is Melissa Gragg and I am a divorce valuation expert in St. Louis, Missouri.

I work with business owners and entrepreneurs in every stage of the divorce process, whether in mediation or litigation. There are many questions and myths about what happens in a divorce when you own a business.

Here are the top valuation issues every business owner should know before you file for divorce.

Another question people will ask is

In a divorce - How do we split the business? Will I have to continue to own the business with my spouse?

I have seen times where a judge will allow a divorcing couple to continue to own the business, but usually that is because both people are highly involved in the company and they request to stay owners. Even then, it is a sticky situation for the judge. Typically, the courts want to see one person maintain the business and the other person no longer in the business.

Most of the time a couple things that they're going to have to buy the other person out of the business and in some respect this is true but the reality is that we are valuing the business in order to provide a number that we put on your statement of property and list it as one of the assets that you own in the marriage. So, this means that you could have a business worth $1,000,000 as well as retirement accounts, houses, cars, and other investments. It could be that one person keeps the business worth $1,000,000 and the other person receives other assets or investments also equal to a million dollars.

There are situations where the business could be the primary asset or has the largest monetary value in the marriage and there isn't enough other cash or investments or houses to provide the spouse with a million dollars of other assets. In this case there could be a payment for the distribution of those assets over time and the business owner would be paying the spouse over a certain number of years in order to make the distribution of the marital assets equitable or fair, in the courts eyes. As a reminder, the rules of divorce are different in each state which means that the way the assets are divided could be different if you were in Missouri as opposed to Illinois, Tennessee or Kansas. This is one of the reasons that a couple would seek to settle the valuation issues and payments outside of court, to have some control over how the property is split. If you have one or both people that are unreasonable in their expectations, then they may have to go to court and have the judge decide how to split the assets.

So, I am considering filing for divorce, but want to be prepared - What should I do next?

Give us a call! No really, you should reach out to someone who specializes in valuations for the purpose of divorce. There may be many valuation companies near you, but do they understand the divorce court system in your state? That would be a good first question to ask. Then see how many times they have testified. Are they trained as a mediator? Do they understand how to negotiate settlements with other experts?

If you have any additional questions or would like to talk about your specific situation, please give us a call or text us at 314 541 8163 or check out our website at ValuationStLouis.com

Click here for our next video in our series for business owners + divorce.