Reaching a property division agreement is a common part of any divorce proceeding. For some couples, dividing property is easy, especially when couples have not been married for very long or don’t own very many assets. Dividing property is also more straightforward when a prenuptial agreement exists because, assuming the prenup is valid, property will simply be divided per the terms of the agreement.
One thing that can certainly complicate a divorce and a property division agreement, however, is in the event that one or both parties own a business. If you are tasked with the responsibility of splitting up a business in a divorce, our Massachusetts divorce lawyer can provide you with the advice and guidance you’re looking for.
An Overview of Massachusetts Property Division Law
First, it’s important to know how a court will divide property in the event that the divorcing couple cannot come to an agreement on their own. In Massachusetts, all marital property (property acquired during the course of the marriage) must be divided in a manner that is equitable. In order to determine what is equitable, a court may consider the age and health of each party, the separate property and debts of each party, the sources of income of each party, future opportunities for property acquisition, and any other relevant factors.
Dividing a Business in a Divorce
If a court finds that a business is indeed marital property, it must be divided between the spouse in a manner that is equitable. Note that couples are encouraged to reach an agreement on their own outside of court if they are able to, and that mediation is strongly recommended. Some ways in which a couple (or a court) may decide to divide a business in a divorce include:
- One party maintains ownership of the business in exchange for giving up another asset (such as shared real estate);
- One party buys half of the business from the other, providing that party with full ownership of the business;
- Each party continues to own their half of the business and the parties continue running the business together; or
- The business is dissolved/sold and any proceeds from the business are split amongst the parties.
Before parties determine how a business should be divided, it’s important that a business’ value is understood by both parties. Things to consider in determining the value of business include:
- Market and economic trends;
- Cash flow;
- Business assets; and
- Predicted future growth.
It is strongly recommended that you work with a financial expert and professional business appraiser in determining the value of a business and the best way to divide the business in your divorce.
Consult with Our Massachusetts Divorce Lawyer
When you hire a Massachusetts divorce lawyer from the office of Lovenberg & Associates, P.C., we will work hard to protect your best financial interests in your divorce. To learn more about property division laws in our state and how to negotiate your divorce settlement, please send us a message or call our law firm at (617) 973-9950. We are ready to sit down to discuss your case today.