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Dividing the marital assets of a business owner can be tricky

On Behalf of | Aug 16, 2018 | Divorce

The foundational concept of splitting marital assets 50/50 in an Ohio divorce is well established. However, this rarely means that each spouse receives the exact same distribution of assets. It’s most often necessary to award assets on an offset basis whereby the respective parties receive equivalent, rather than identical, assets.

This most commonly occurs when one spouse receives the marital home in the divorce, which typically is the family asset that has the most value. In such a scenario, the fair market value of the house can reasonably be agreed upon. If the family owns a business with significant value, however, the division process can be more complicated. This is especially true when one spouse has essentially total control of the business.

A seminal issue arises from the various methods used to value a business. While there are many approaches, three of the more common options are based on valuing assets, income or market worth. Each of these methods requires full access to the company’s financial records.

The spouse who controls the business must be trusted to reveal the true nature of the company’s economic value. Some dishonest spouses attempt to hide the true value of a business in order to shortchange the other partner during the property division process. Even if there is transparency, there can be significant disagreement over matters such as the operator spouse’s contribution to the business.

There are many potential issues that could arise during the dissolution of a marriage. In cases where a family business is involved, a divorce lawyer can fully explain the rights and responsibilities of the parties.