Divorces Involving Family-Owned Businesses
When a family owns a business, that business is important. It is a source of revenue, meaning and great pride. When couples divorce, the fate of the business is an issue of concern to both sides. At the law firm of Reinstein, Glackin & Herriott, LLC we assist in the delicate process of dealing with family businesses.
In an equitable distribution state like Maryland, there are more options in property division. Our firm uses all its creativity to evaluate marital assets and then to divide them in ways that make sense, that are fair, and that minimize negative tax and other consequences.
Determining The True Value Of Your Business
Businesses are often used to shield assets from view. In our valuation process, we locate and identify these hidden assets and include them as marital property when appropriate. In cases where the partner operating the business is acting in bad faith, a receiver may be appointed to prevent misbehavior. It is common for one side to characterize the business as troubled, and for the other to see it as a cash cow. A proper analysis will resolve these opposite perspectives.
It is always wise to have a plan in hand. Many couples enter into prenuptial or postnuptial agreements resolving issues like business division in advance. The lawyers at Reinstein, Glackin & Herriott, LLC, have worked with many couples to create workable plans. Lacking a legal plan, the courts may assign a business to the person who had greatest responsibility for it, and assigning comparable assets to the other partner — effectively a buyout.
Finding Solutions For Business Owners Who Divorce
When neither side can afford to buy out the other, the business must sometimes be sold, with the proceeds divided between the two. Typically, one party would continue in business and the interest of the other party is bought out. The business would be appraised and that amount is given to the party that was bought out. In especially complex situations, parties may wish to consult other professionals — an appraiser, an accountant or a business expert — to provide input to making a good division.