How Will My Assets Be Divided If I Owned A Business Before And During Marriage?
It’s a very common situation when someone owns a business before they get married and during their marriage. In Nebraska, the law is clear about how the value of the business at the time of the marriage would remain with the spouse that owned the business prior to marriage. Therefore, you get to keep the value that you had at the time you entered into the marriage. However, any increase in value of the business would be considered a marital asset. For instance, if a husband owns a business that is worth $500,000 before he gets married or at the time of marriage, any increase after marriage would be divided between the spouses in a divorce. If the business is worth $1 million at the time of divorce, then the wife would be entitled to half of the increase in value. In this situation, the increase is another $500,000. Thus, she would be entitled to $250,000. Her husband would keep the pre-marital interest, which is $500,000, plus half of the increase in value of another $250,000. Therefore, the husband would get a value of $750,000 while the wife would get a value of $250,000.
How Does The Division Of Assets And Debts Change If Both Parties Own A Piece Of the Business?
If both parties own a share of a business, the division of assets and debts can be complicated. If a husband and wife own a business together and a divorce proceeding is filed, it’s likely that only one person will remain as the owner of their business. It’s very difficult for people to go through a divorce and continue to function together in a business setting. There have been situations where the divorced couple continue to operate the business together, and there are a few success stories, but there are more horror stories than success stories.
Usually, the parties would have to agree between themselves whether the husband or the wife is going to continue with ownership. Once ownership has been determined, the spouse with ownership interest would have to buy the other spouse’s interest or their share of the business. It’s the most practical solution.
If the spouses can’t agree on ownership, then the matter will have to be taken to court. In court, a judge will determine which of the two parties is better suited to continue operating the business, and/or the resources to buy out the other one’s interest.
Can I Sell My Business During A Divorce?
You cannot sell your business during a divorce. However, there are exceptions. For instance, if both the husband and wife decide that selling the business is in their best interest, and there is an agreement that makes sense to liquidate the business, then the business can be sold. The proceeds from the sale would be held until a final settlement in the divorce is reached.
An exception can also be considered if one party wants to sell the business and the other spouse is not agreeable, the party that wants to sell can go to court and ask the judge for permission to sell. If the party that wants to sell tells the judge that they don’t want the business once the divorce is over and neither does the spouse, but he or she is just being an obstructionist, in most cases, the judge would grant permission to sell. However, both spouses would then have to be involved in the sale. They would have to agree on listing prices or sale prices. The easiest way to sell a business during a divorce is to get your spouse to agree. Otherwise, the court will have to get involved in those decisions.
If My Spouse And I Share A Business, Can I Buy My Partner Out During A Divorce?
If you and your spouse share a business, you can buy out your partner during a divorce. However, most lawyers would advise otherwise. A transaction like selling a business in the midst of a divorce only complicates things. Also, you don’t want to increase the value of the marital estate by buying out your partner’s interest during the marriage, which then causes you to pay half of the additional value over to the non-owning spouse. Therefore, most lawyers would strongly discourage anyone from buying out a partner’s interest until the divorce is completed.
For more information on Complicated Divorce Involving Businesses, a consultation is your next best step. Get the information and legal answers you are seeking by calling (402) 235-6070 today.
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