For many Florida business owners, the end of the marriage entails numerous financial decisions, not all of which are directly related to the union itself. Unless specific provisions were laid out in a prenuptial agreement, business assets will become part of the property division process. An important consideration during the early stages of negotiations involves comprehensive understanding of the tax ramifications associated with various options.
For example, many spouses make the mistake of taking a narrow focus of an expansive topic. For example, arguing over who will retain the family home is a common scenario. For business owners, it may make more sense to cede interest in the family home in exchange for a greater share of business assets.
To begin, real property is an illiquid asset, and has different valuation than other types of investments or cash holdings. A home may be valued at $450,000 at the time of divorce, but the final value will be determined by market conditions, taxes and a number of other factors. On the other hand, business assets can continue to grow with proper management.
In a divorce in which a Florida business owner wishes to retain the lion's share of business assets, and his or her spouse is narrowly focused on the family home, the property division decision should be easy. Ceding interest in the home is usually a far better financial decision in the long run. As with all matters pertaining to divorce and business assets, enlisting the services of a financial advisor is always a wise course of action.
Source: cnbc.com, "When it comes to divorce, not all assets are equal", Sarah O'Brien, Sept. 22, 2017