What happens in a shared business divorce?
Joy M. Feinberg’s Answer In Shared Business Divorce:
A shared business divorce can be complex because businesses have value. Your lawyer needs to know what professionals to work with in order to fairly value that business and persuasively present the company’s true value to your spouse or, if required, to the court. The method of valuation is something to be determined by you, your lawyer and your expert appraiser.
Divorce valuation differs from how an entrepreneur best utilizes US tax strategies to reduce taxes. Your lawyer and professional should know these differences and should be prepared to reframe the company expenses into what is the “real” or “true” income from the company. Entrepreneurs deduct meals, automobiles, cell phones, insurances,
capital improvements, which may include rehabbing housing; acquiring artwork unnecessary for the corporation or other “one-time” expenditures made prior to divorce in order to reduce the company’s profitability.
Divorce is planned long before actual papers are filed. For the business owner, it is good planning to repair the roof of the building housing the business, purchase new equipment hire new people and many other both legitimate moves are made to protect the business.
But there are also those tactics which border on or are fraudulent.
When one lives the high life but a business owner alleges it is a failing business during divorce – careful examination of the records will occur. It is better and cheaper to play it straight. Once you lose credibility in the eyes of the mediator, arbitrator or judge, things will not go your way.
- What is “Discovery”?
- So often a party’s income plummets during a divorce. What do you do?
- What should a business owner’s first step be to avoid disruption during divorce?
- In a divorce, do our assets always get divided up equally?
- A common question raised by many affluent clients is whether “hidden assets” can be found.
- My wife and I own a business together. What happens to our business when we divorce?
- Are there any unique issues when a professional – a doctor or dentist, for example – is going through a divorce?