If you or your spouse is a business owner and you’re about to get a divorce, you have a lot to consider. The Law Offices of Eric R. Posmantier, LLC has extensive experience representing individuals who own businesses of all sizes as they go through the divorce process, and we’re prepared to put that experience to work for you as well. Contact a seasoned Fairfield County business owner divorce lawyer from our legal team today.
Business Owner Divorce Lawyer | Representing Clients in CT
For years, The Law Offices of Eric R. Posmantier, LLC has been a trusted legal resource for couples facing divorces involving businesses in Connecticut, and our legal team is prepared to put that experience to work for you. Whether you’re hoping to have your divorce mediated outside of a courtroom setting or have no choice but to take it to trial, our legal team stands ready to safeguard your interests, every step of the way. Speak with a seasoned Connecticut divorce lawyer from our firm so we can get started.
How Courts Tend to Divide Businesses in Divorce in Connecticut
In Connecticut, courts strive for an equitable division of marital assets, including businesses. However, importantly, the phrase “equitable” does not always mean equal, or 50/50. The equitable distribution process involves a thorough examination of the business's worth, its role in the marriage, and its potential for future earnings. Courts often consider the contributions of each spouse to the business. If the business was founded during the marriage, it is likely considered a joint asset, and is, therefore, subject to equitable distribution, even if one spouse didn’t directly contribute to normal business operations.
Factors that Make Business Owner Divorce Unique
Divorces involving business owners are inherently complex due to a wide range of factors that don’t typically surface in standard divorce cases. Understanding these unique elements is crucial for any business owner or the spouse of one going through a divorce. Some unique considerations for business owners and their spouses facing divorce are as follows:
Business Valuation Complexities: Determining the value of a business is a multifaceted process. It involves assessing not just current earnings, but also future profitability, market position, and intangible assets like brand value and goodwill. Valuation is further complicated if the business was established before the marriage but grew in value during the marriage.
Impact on Non-Owner Spouse’s Lifestyle: The non-owning spouse might have become accustomed to a lifestyle supported by the business. This factor plays a significant role in alimony and property division, as the court considers the maintaining of a comparable standard of living post-divorce.
The Business's Role in the Community: Some businesses are integral to their communities, employing local residents or contributing to local economies. Divorce proceedings might need to consider the wider impact on the community, particularly for prominent local businesses.
Future Earnings and Growth Potential: A business is not just valued on its current financials but also on its potential for future growth. This future potential can make negotiations and valuation more complex, as it involves forecasting and speculation.
Emotional Attachment to the Business: Often, a business is more than just a financial asset; it represents a spouse’s passion, hard work, and identity. This emotional attachment can complicate negotiations, as the owner-spouse may fight harder to retain control.
Intermingling of Personal and Business Finances: In many small businesses, personal and business finances are often closely intertwined. This intermingling can create challenges in distinguishing personal assets from business assets during a divorce.
Business Liquidity and Asset Division: Unlike liquid assets like bank accounts, a business cannot be easily divided or sold without potentially damaging its operations. Creative solutions are often required to equitably divide assets without harming the business.
Outside Experts Commonly Used in Business Owner Divorce
Divorces involving businesses often require the expertise of various outside professionals. These experts provide critical insights and valuations that are essential for a fair and equitable divorce settlement. Some examples of third-party experts that may be involved in a business owner divorce are as follows:
Business Appraisers: They perform a comprehensive valuation of the business. This process includes analyzing financial records, market position, competition, and growth potential. Business appraisers use different methodologies to ensure an accurate and fair valuation.
Forensic Accountants: These professionals are crucial when there are suspicions of hidden assets or when the finances are complex. They specialize in uncovering and accurately reporting financial data, which is essential for transparent proceedings.
Financial Advisors: They help in understanding the long-term financial implications of different settlement options. Financial advisors can also assist in restructuring personal finances post-divorce to adapt to the new economic circumstances.
Tax Professionals: Divorce can have significant tax implications, especially when a business is involved. Tax professionals provide advice on structuring the settlement in the most tax-efficient manner, thus avoiding unexpected tax liabilities.
Mediation for Business Owner Divorces in CT
Mediation in the context of business owner divorces offers a more collaborative and less adversarial approach compared to traditional litigation, and is especially beneficial for divorcing couples where a business is a significant marital asset. The specific advantages of mediation in these situations are manifold, and include the following:
Mediation Preserves Business Operations: Mediation minimizes disruptions to the day-to-day operations of the business. Unlike court proceedings, which can be time-consuming and public, mediation is a more private and efficient process, allowing business owners to maintain focus on their business activities.
It Offers Flexibility in Solutions: Traditional litigation often results in a judge making final decisions, which might not always suit the unique circumstances of the business or both parties involved. Mediation, on the other hand, allows for creative and customized solutions that are mutually agreeable and tailored to the specific needs of the business and the individuals involved.
It is Confidential: Mediation is a private process, which is particularly important for business owners who wish to keep the details of their divorce and business affairs out of the public domain.
Mediation Often Reduces Hostility: The collaborative nature of mediation can help maintain a cordial relationship between the divorcing parties. This aspect is particularly beneficial if both parties will continue to have roles in the business post-divorce or need to co-parent effectively.
Mediation is Cost-Effective: Mediation can be more cost-effective than litigation. Lengthy court battles can deplete both parties' resources, which is particularly problematic when those resources are tied up in the business. Mediation, by reducing the time and resources spent, can preserve more of the business's financial stability.
Contact The Law Offices of Eric R. Posmantier, LLC Today
Whether you’re a business owner or are divorcing your business owner spouse, you need a competent Fairfield County business owner divorce lawyer in your corner who can effectively protect the assets you’re entitled to. Contact The Law Offices of Eric R. Posmantier, LLC today.
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