If you are a business owner, and you are considering divorce, read this first.
Under to Florida Statute 61.075, property owned by you and your spouse falls in one of two categories: marital or nonmarital.
Specifically, marital property typically includes:
- Assets and liabilities accrued during your marriage, whether accrued individually or jointly.
- The enhancement of value and appreciation of nonmarital assets as a result of either spouse during the marriage or from the investment of marital funds or other forms of marital assets, or both.
- Gifts given between spouses during the marriage.
- All vested and nonvested benefits, rights, and funds earned during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs.
- All real property held by spouses as tenants by the entireties, whether acquired before or during the marriage is considered a marital asset.
- All personal property titled jointly by spouses as tenants by the entireties, whether acquired before or during the marriage, is considered a marital asset.
The Statute also states that nonmarital property includes:
- Assets and liabilities accrued by either spouse before the marriage, along with assets and liabilities accrued in exchange for those assets and liabilities.
- Assets acquired separately by either spouse by gift (not between spouses or to the spouses as a couple, but as individuals), bequest, devise, or descent, and assets accrued in exchange for those assets.
- All income earned from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the spouses as a marital asset.
- Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the spouses, and assets or liabilities accrued in exchange for those assets and liabilities.
- Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse. That liability shall be a nonmarital liability of the spouse committing the forgery or having attached the unauthorized signature alone.
So what does that mean if you start or acquire a business while married?
Does your spouse have an interest?
What if you owned the business before you got married, does your spouse have an interest then?
The answer could be yes in all cases.
Let us explain.
As the factors outlined above suggest, if you started your business during your marriage, your spouse could have a marital interest in your business because all assets and liabilities accrued during your marriage are usually deemed marital.
But, your spouse could also have an interest in your business if your nonmarital business asset was converted into a marital interest because funds (or some other asset) earned by either spouse during the marriage was used to enhance or increase the value of the business.
Essentially, if you own a business and your wife contributed to the growth of your business financially or enhanced the value of the business in some other way, she could have an interest in your business upon divorce.
Determining whether or not a nonmarital business asset has become a marital asset requires a detailed and expert legal analysis. In fact, an experienced family law attorney should recruit the expertise of a business valuation expert or CPA to determine the value of the business for the purpose of divorce.
If you’re not sure where you stand, seek quality legal counsel to provide you guidance.
To learn more about whether or not your spouse could have a marital interest in your business, click here to request a consultation or call 407-872-3161 to speak with one of our Orlando Divorce Attorneys today.