A Georgia divorce represents more than the end of a relationship. If you or your spouse has an interest in a business or a professional practice, the economic side of divorce proceedings could have a serious impact on how and whether it continues to operate in the future. Understanding your financial and property rights, including rights to an ownership interest in a business or practice, should begin by taking a look at equitable distribution and the division of assets as a consequence of a divorce. Equitable distribution: Marital vs. separate property Equitable distribution of property the parties acquired during the marriage is issue that must be resolved during divorce proceedings in Atlanta. In other words, a home purchased by a couple during their marriage is marital property subject to division between the parties. The form of title, whether in the name of one of the parties or in joint ownership, is irrelevant. There could be a different result when the property in question was owned by one of the spouses prior to the marriage. As a general rule, such property would be treated as separate property to be retained by the spouse who owns it and not subject to division under equitable distribution. Separate property includes premarital property, property inherited by a spouse either before or during the marriage or gifts received from third parties during the marriage. An asset that was separate property at one time could have all or part of it treated as marital property during a divorce depending upon circumstances surrounding it. For instance, the appreciation in value of separate property during the marriage might be marital property if the increase in value was due in whole or in part to the use of marital assets or to the efforts of the non-owning spouse. An example of this would be a home owned by a spouse before the marriage renovated using funds from the joint savings of the married couple. The increased value attributed to the renovation could be treated as a marital asset even though the house otherwise retains its status as a separate asset. Unless the parties to a divorce reach a negotiated agreement as to how property is to be divided, a court will divide marital assets in an equitable manner. “Equitable” does not necessarily mean an equal division of marital assets. Courts may take into consideration the following factorsin deciding how to distribute marital assets:
Future financial needs of each spouse
Whether a spouse concealed or misused assets
Current financial status of each spouse including ownership of separate property
Courts in Atlanta treat ownership of a business or a professional practice the same as they treat other assets in a divorce.
Businesses and equitable distribution
It is within the discretion of the judge hearing a divorce case to decide upon the best method for achieving equitable distribution of marital property, including ownership of businesses or professional practices. Marital assets may be distributed in kind, meaning without first being sold to convert their value into cash as long as an equitable result may be achieved. Sometimes, assets must be sold to achieve a desired result, which can become problematic for a spouse who owns a business.
Ownership of a business or a professional practice can be a marital asset according to a decisionfrom the Supreme Court of Georgia. It ruled that an ownership interest in a business could be subject to equitable distribution. It also referred to the treatment of the appreciation in value of a business acquired prior to the marriage and ruled the increase in value could be treated as a marital asset provided there was evidence proving the appreciation was due in whole or in part to the efforts of the non-owner spouse.
Determining the value of a business in a divorce
The first step when dealing with a business or professional practice in a divorce is identifying it as marital or separate property. If it is classified as a marital asset, it must undergo a business valuation by a certified public account or other expert capable of providing the court with evidence as to its current value. This can be a complex process, particularly when the business or practice is separate property that has appreciated in value during the marriage and the extent of the increase in value attributable to the non-owner spouse must be identified.
A divorce lawyer can be of assistance
An Atlanta divorce attorney with substantial experience handling the complex issues that arise during a divorce can be of assistance when one or both spouses has an interest in a business or professional practice. The guidance and legal advice provided by the attorney may help to avoid disruption of the business or practice with options including a negotiated settlement.