For over 35 years, The Gentry Law Firm has helped clients across Georgia fairly assess business ownership and other investments in high-asset divorce issues.
With compassion for what you helped build and experience with businesses of all shapes and sizes, our business divorce attorneys serve Metro Atlanta and can help get what’s right. The Gentry Law Firm and our experienced Marietta family attorneys are ready to explain your options and pursue everything you deserve.
How Do You Value a Business in a Divorce?
When spouses are also business partners, assessing and dividing assets gets challenging. The business is valued and sold in many instances where spouses hold a majority or minority share in a family business. Other times, one spouse buys the other’s shares. Rarely a divorced couple decides to remain business owners.
Three Approaches to Business Valuation
Business valuation is critical to equitable distribution of assets. That’s why we consult with expert appraisers who objectively evaluate business assets and debts. We strongly encourage a third-party expert to avoid unscrupulous manipulation or misrepresentation by one side or the other.
The asset method of evaluating a business is based on a simple formula:
Assets minus liabilities equals value.
Assets include tangible items, like inventory or property. Intangible assets include things like trademarks and accounts receivables. The asset approach works well on small businesses.
This approach is like real estate “comps” comparing similar businesses’ values.
An appraiser uses historical information to predict profits, cash flow, and risk. The income approach also considers fluctuations in the market, infrastructure, and labor.
An accurate business valuation makes it easier to divide assets equitably. A divorce attorney may recommend a Certified Public Accountant (CPA), a Certified Business Appraiser (CBA), or an Accredited Senior Appraiser (ASA).
Distribution of Marital Business Assets
In general, any property (including a business and its assets) that either spouse acquires during the marriage is considered marital property – regardless of who has the title or full ownership. Separate property is acquired before marriage, such as a third-party inheritance or gifts from someone other than the spouse.
Family-owned businesses include:
- Closely-held companies
Georgia is an equitable distribution state (Georgia Code § 19-5-1). Under state law, marital assets are divided to produce a fair but not necessarily equal division. The court considers each person’s financial and non-financial contributions to the marriage.
Protecting Your Businesses in Georgia After A Divorce
With an extensive background in divorces involving business owners, our Georgia legal team is ready to protect what you built, everything you’re entitled to, and provide realistic answers regarding:
Business Start Dates
A business started before the marriage does not necessarily mean that the other spouse is not entitled to its assets. While a portion of the company – between the business start date and date of marriage – might be considered separate property, the remaining portion may be marital property.
It’s implausible that one spouse funded and operated a business entirely separate from their marital assets and debts. A divorce and business lawyer can assess the entire financial landscape to ensure the appropriate distribution.
Funding & Investments
Even if one spouse acquired (or inherited) a business interest before marriage, any investment into the business after marriage affects both parties. In most cases, both parties contributed to the couple’s business enterprise through their labor, finances, or another meaningful way.
Contributions to the Business
Contributions to a family business or partnership are not one size fits all. Some couple-owned businesses remain lucrative because one spouse takes care of day-to-day operations while the other spouse raises their children and maintains the family home.
Women filing for divorce are primarily concerned for their and their children’s well-being. Having your attorney fight for your share of a business you contributed to, directly or indirectly is essential.
Property Division Decisions
Even when spouses agree on dividing marital assets, the court must review and approve property division. When spouses cannot agree, the court has the discretion to distribute assets as equitably as possible.
Influencing Factors on Property Division:
- Income and financial resources of each spouse
- Future needs of each spouse
- Evidence of misconduct that resulted in loss or waste
- Financial and non-financial contributions made by each spouse
Our Georgia Business Divorce Attorneys Are Ready to Help
Family-owned businesses add a layer of complexity to high-asset divorces. You want to protect your interests and, at the same time, negotiate favorable terms in other areas, such as property division, divorce mediation, and child custody.
Our Marietta business ownership attorneys listen to your story and your post-divorce goals. The Gentry Law Firm combines exceptional client support with decades of local experience in Georgia family courts. Let us negotiate and, if necessary, litigate for the best possible outcome for your business, your children, and your future.
Trust our legal team to take care of the many aspects of your divorce:
- Accurate Business Valuations
- Uncover Hidden Assets
- Fairly Split Property and Business Assets
- Reach Favorable Buyout Agreements
- Divide Retirement & Investment Accounts
- Negotiate Favorable Support, Custody, & Settlement Terms