When couples decide to part ways through divorce, dividing assets can become a complex and contentious process. This is especially true when it involves a family-owned business. The family business often holds significant sentimental and financial value. This can make it a focal point of contention during divorce proceedings.
Understanding how Georgia law approaches the division of assets, including family businesses, is important for anyone navigating the dissolution of a marriage.
Understanding equitable distribution laws
In Georgia, divorcing couples are subject to equitable distribution laws. This means that marital assets undergo fair, but not always equal, division. When it comes to dividing a family business, courts will consider various factors to determine an equitable distribution. Such factors might include each spouse’s contribution to the business, the value of the business and the financial needs of each party.
Valuing the family business
Determining the value of a family business is an important step in dividing its worth. Appraising the business involves assessing its assets, liabilities, cash flow and market value. Couples may choose to hire professionals, such as business valuators or forensic accountants, to ensure an accurate assessment.
Dividing the family business
There are several options for dividing a family business in a divorce. A common approach involves one spouse buying the other’s share of the business. This might occur through a lump-sum payment or structured buyout arrangement. On the other hand, spouses may choose to continue co-owning and operating the business post-divorce. However, this option requires effective communication and cooperation between the former spouses. In some cases, couples may sell the business and divide the proceeds under equitable distribution principles.
Dividing a family business in a divorce requires careful consideration and negotiation to ensure a fair outcome for both parties. By understanding the legal framework surrounding asset division and exploring various options, divorcing couples can navigate this challenging process with greater clarity.
