Link to part 1 of How to Retain Wealth in Divorce

Business ownership may be the largest single asset in a divorce. Florida law seeks to maintain the business as an operating entity in favor of the party who runs it. When the Court exercises its discretion in equitably distributing assets and debts of the parties, it will set a value of the business as well as all other assets based upon appraisals. The law in Florida currently varies from Court to Court in whether the Court will set off from the value of the business an amount equal to the value of a non-compete agreement of the principal in the business. This can change the value of the business very significantly. You need to discuss this feature of the law with your family law attorney to be sure that you understand the impact this may make on your settlement or the outcome of trial.

Tax effects of business and other assets should be considered in your plan of equitable distribution. For example, if you have a marital home with equity of $100,000.00 and a pension plan whose yearly statement reflects a value of $100,000.00, they look like the same value but they are not. There is no tax due on the sale of the marital home in most circumstances but there is an unpaid tax burden on the pension which must be paid at some point. It could make a difference of 18-35% in value.

Finally, businesses have an advantage in that they can employ legitimate strategies that affect not only their value but the ability of the Court to divide their assets. Consult with your attorney about how to address and respond to these opportunities and challenges.

About Richard Knellinger

The Law Office of Knellinger, Jacobson & Associates provides legal advice and representation for individuals, entrepreneurs, and business owners in Gainesville, Florida, and communities throughout north central Florida, including cities such as Ocala, Starke, Palatka, Lake City, Middleburg, Trenton, Bronson, Lake Butler, Cross City, Williston, Chiefland, Alachua, Jasper, Live Oak, and Jacksonville, Florida.

Alachua County ● Putnam County ● Clay County ● Bradford County ● Union County ● Columbia County ● Gilchrist County ● Levy County ● Marion County ● Hamilton County ● St. Johns County ● Dixie County