Salt Lake City Divorce For Business Owners Attorneys

Respected Salt Lake City Divorce Attorneys For Business Owners in Utah

At Collins Rupp, P.C., we know that the division of assets in a divorce can be a complex – and sometimes contentious – process, especially if you and your spouse have built up a healthy portfolio of assets, like the family home and other real estate, retirement accounts, and investments. This process becomes even more difficult if one or both of you own a business. In many cases, a business will be considered a marital asset, and its value needs to be determined when it comes to dividing up the marital estate.

Our divorce attorneys have extensive experience in business valuation in divorce, and we understand the legal and financial impact that divorce can have on what is one of the biggest assets you may own. We will work with financial analysts, appraisers, forensic accountants, or any other necessary financial professional to determine what the true value of the business is and how best to protect your interests and ensure that you receive the fairest outcome in your divorce settlement.

Is the Business a Marital Asset?

The first step our attorneys will take is determining whether or not a business should be included as a marital asset. Some of the factors that could come into play include:

• Whether the business was started before your marriage.
• Whether the business was gifted or inherited.
• Whether the business was started or acquired after you and your spouse separated.
• Whether the business is protected in a prenuptial or postnuptial agreement.

It is important to understand that even if the business was started before the marriage or was a gift or inheritance, any increase in value during the marriage could be deemed a marital asset, potentially affecting decisions about property division.

Determining the Value of the Business

Valuing a business accurately is crucial, but it can sometimes be challenging. Depending on what type of business it is, the valuation could involve assessing both tangible assets and intangible assets. Tangible assets are items such as property and equipment. Intangible assets are things like brand reputation, customer relations, and intellectual property.

There are three different methods of business valuation that are commonly used:

• Asset valuation – All of the tangible and intangible assets of the business are added up. All of the company’s liabilities are subtracted from the asset total. The leftover sum is the business value.
• Market valuation – This method is similar to real estate valuation. An appraiser is brought in to determine the value of the business based on similar businesses that have recently been sold.
• Income valuation – This form of valuation considers the history of the business and other factors, taking the net operating income and dividing it by the capitalization rate. It can provide an estimate of both the current and future value of the business

It is possible for all three of these methods to yield significantly different amounts. This is why it is critical to work with our divorce attorneys to ensure that your interests in the future of your business are protected.

Dividing Business Assets

Once we have established the value of the business, our attorneys will help you decide what the best course of action for your situation could be. There are generally three options available. We will thoroughly evaluate each option to determine which option works best for you.

The first option is for one spouse to buy the other spouse out of their share of the business. This is where having an accurate value of the business is crucial. For example, if the business is valued at $1 million, then each spouse’s share may be calculated at $500,000. The spouse keeping the business would have to “pay” the other spouse $500,000. Depending on what other assets the couple owns, this can be done by waiving his or her share of other marital assets, such as the family home, ensuring that the other spouse's share of the marital estate will be similar to that amount.

Another common option is to sell the business and then split the proceeds from the sale. This is a good option if neither of the spouses wants to keep the business or cannot agree on how it should be divided.

A third option is for the couple to remain as co-owners of the business and keep running it together. In these cases, it is important to establish a partnership agreement that ensures that each spouse fully understands their rights and responsibilities going forward.

Contact Our Salt Lake City, UT Divorce Attorneys for Business Owners

Divorce can be a complicated and challenging process, even under the best of circumstances. At Collins Rupp, P.C., we have often seen cases that start out amicably quickly turn into battles over assets and property. Make sure your financial future is protected by having one of our seasoned divorce attorneys advocating for you. Your financial future depends on it. Call 385-777-2753 today or contact us online to schedule a free and confidential consultation.