Understanding the Legal and Financial Implications in Florida
Orlando is home to many business owners, professionals, and high-net-worth individuals who have built successful enterprises. When facing a divorce, one of the most pressing concerns is whether a business can be sold before or during the legal process. Whether you are looking to sell your business to protect your financial future or are concerned about your spouse attempting to sell a shared business, it is essential to understand the legal implications under Florida law.
I am Beryl Thompson-McClary, an Orlando high net-worth divorce Attorney, and I help business owners and spouses navigate complex divorce proceedings in Orange County, Florida. If you are contemplating selling your business or suspect your spouse might, you need legal guidance to protect your rights and financial interests. Call me at 1-888-640-2999 to schedule a consultation.
Can You Sell Your Business Before a Divorce?
If you own a business and are considering selling it before initiating divorce proceedings, there are several factors to keep in mind:
- Marital vs. Non-Marital Property: Under Florida Statutes §61.075, assets are classified as either marital or non-marital property. If the business was established before marriage and has remained separate, you may have more flexibility in selling it. However, if marital funds or efforts contributed to its growth, your spouse may have a claim to a portion of the proceeds.
- Dissipation of Assets Concerns: Florida law prohibits spouses from intentionally depleting marital assets in anticipation of a divorce. If the business is considered marital property, selling it before divorce could be seen as an attempt to avoid equitable distribution, which could lead to legal consequences.
- Impact on Divorce Settlement: If you sell the business before filing for divorce, the proceeds from the sale may still be subject to equitable distribution. The court will examine whether the sale was conducted in good faith and at fair market value.
If you are considering selling your business before a divorce, consulting an Orlando high net-worth divorce Attorney is critical to ensuring compliance with Florida law and protecting your financial interests.
Selling a Business During a Divorce
Selling a business while the divorce process is ongoing is often more complex. Florida courts place restrictions on asset transactions once divorce proceedings have begun to ensure fairness and prevent financial manipulation. Here are key factors to consider:
- Court Approval May Be Required: If the business is part of the marital estate, selling it during divorce may require court approval. The court will evaluate whether the sale is necessary and whether it aligns with equitable distribution principles.
- Valuation and Fair Market Sale: The business must undergo a professional valuation to determine its worth. The court will not approve a sale that undervalues the business or disadvantages the other spouse.
- Division of Proceeds: If the sale is permitted, the proceeds will be subject to division under Florida’s equitable distribution laws. The court may allocate a portion to the non-owner spouse, particularly if they contributed to the business’s success.
- Potential for a Buyout: If one spouse wishes to retain ownership, a buyout agreement may be negotiated. This option allows one spouse to maintain control while compensating the other fairly.
If you are facing a high-net-worth divorce and need guidance on selling a business, I can provide strategic legal counsel to protect your interests. Call me at 1-888-640-2999 to discuss your options.
Legal Ramifications of Selling a Business in Divorce
Florida’s Equitable Distribution Laws
Florida follows the principle of equitable distribution, meaning that marital assets, including businesses, are divided fairly but not necessarily equally. Under Florida Statutes §61.075, the court considers several factors when determining distribution, including:
- The length of the marriage
- Each spouse’s contribution to the business (direct or indirect)
- The financial situation of each spouse
- Whether the business was acquired before or during the marriage
- The future earning potential of each spouse
If the court determines that the business is a marital asset, both spouses may have a claim to its value, regardless of ownership on paper.
Consequences of an Unauthorized Sale
Selling a business without court approval during a pending divorce can result in serious legal consequences, including:
- Legal Penalties: The court may impose financial penalties or order reimbursement if the sale is deemed unfair or against Florida law.
- Reallocation of Assets: If the business was improperly sold, the court may adjust asset division to compensate the other spouse.
- Contempt of Court: If a court order prohibits asset sales during divorce proceedings, violating this order could result in contempt charges.
Before making any decisions regarding a business sale, consult with an Orlando high net-worth divorce Attorney to avoid costly mistakes and ensure legal compliance.
FAQs About Selling a Business Before or During a Florida Divorce
Can I sell my business before filing for divorce?
Yes, but if the business is considered a marital asset, the proceeds from the sale may still be subject to equitable distribution. Additionally, if the court believes the sale was an attempt to hide assets or reduce the marital estate’s value, there could be legal repercussions.
What if my spouse tries to sell our business without my consent?
If the business is a marital asset, your spouse cannot legally sell it without your consent or court approval. If you suspect an unauthorized sale, you should immediately seek legal intervention to protect your rights.
How is the value of my business determined in a Florida divorce?
A business valuation is conducted using methods such as asset-based valuation, income-based valuation, or market comparison. Hiring a forensic accountant can help ensure an accurate valuation.
What happens to my business if my spouse and I co-own it?
There are several options: one spouse can buy out the other, the business can be sold and proceeds divided, or both spouses may continue co-owning it under a structured agreement.
Can I use a prenuptial or postnuptial agreement to protect my business in divorce?
Yes. A well-drafted prenuptial or postnuptial agreement can designate the business as separate property, protecting it from division in a divorce.
Will I have to pay my spouse if I sell the business?
If the business is classified as a marital asset, your spouse may be entitled to a portion of the proceeds from the sale. The percentage will depend on various factors, including contributions to the business and overall asset division.
Can a court force me to sell my business during divorce?
In some cases, if neither spouse can afford a buyout and the business is a significant marital asset, the court may order a sale to ensure fair distribution of assets.
Contact Orlando Attorney Beryl Thompson-McClary at 1-888-640-2999 For A Consultation
Whether you are looking to sell a business before or during a divorce or are concerned about your spouse’s actions, I can provide the legal representation you need. Call me at 1-888-640-2999 to schedule a consultation and discuss your options for protecting your financial future.
Beryl Thompson-McClary
Address: 390 N Orange Ave #2300, Orlando, FL 32801, United States
Hours: Open
Phone: 1-888-640-2999
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