Article published by : George Krishton on Wednesday, March 31, 2021 - Viewed 672 times


Category : Family Law and Divorce

Family Law Article: Dividing a Marital Business in Divorce

During divorce, the process of dividing marital property can lead to many disputes, particularly if there is a marital business. Dividing business interests can create unique challenges because business owners often take great pride in their work, the business may be the largest investment or source of income, and the value of the business is not as clear-cut as other assets. Marital property is defined as property or assets acquired during the marriage. If during the marriage an individual or their spouse started their own business, that business is a marital asset subject to division. Additionally, if the business appreciated during marriage because of the business owner’s or their spouse’s labor or efforts, that business is also a marital asset subject to division. Georgia is an equitable distribution state, meaning marital assets are divided based on what is fair and not what is equal. Often equitable distribution results in a close to even division of property unless one party can prove that there is an equitable reason as to why the marital property should be divided differently. Being the only party who worked in the business is generally not going to be sufficient to sway the division of assets in your favor absent extenuating circumstances. That does not mean that the non-owner spouse will get a portion of the business — just that they will get an equivalent value from other assets in the marital estate. To determine the value of the business, the parties can hire a professional business valuator to analyze the financial records and ownership interest. Each party can hire their own valuator and then argue that their valuation is correct in court, or the parties can agree to hire one valuator to serve as a neutral third party. The valuator bases his or her determinations on assets (measurement of profits, debts, inventory, equipment supplies), discounted cash flow (an estimate of future sales figures and profits), and comparables (what similar companies are selling for). These valuation cases can be costly; if the business is new, small, or not of much value, it might not be worthwhile to get a valuation, argue over value, or even to pursue a claim to the business. On the other hand, if one spouse has almost no knowledge of the business but suspects it has significant value, a business valuation is a worthwhile investment. Unless the spouses started the business together and have proven to the court that they can still run their business together after their divorce, Georgia courts will usually award the ownership interest in the business to one spouse — generally the spouse who worked in the business or who had a more involved role in the business if both spouses worked in the business. That ownership interest (the present value of the business) can be offset by awarding other marital property and assets to the non-owner spouse, such as a larger interest in the marital home or retirement accounts. Dividing business interests in a divorce can have a major impact on a person’s current and future financial security. It is important to understand how the courts handle the division of marital businesses, what factors are considered, and how the award can be offset by other marital assets. If you need help with dividing marital assets in a divorce, contact The Rothenberg-Marshall Law Firm at (678) 435-9069 or

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Keywords: Atlanta Divorce Mediation

By: George Krishton

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Article ID 1128572 (Views 672)

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