During the divorce process, it’s common to face many bumps in the road. Spouses owning a business comes with challenges, but a knowledgeable Fairfax divorce attorney can help you navigate any complexities.
Having a divorce lawyer you can trust helps give you peace of mind and ease your stress. The attorneys at Curran Moher Weis are ready to help you.
Before understanding how property is distributed in Virginia, it’s helpful to learn the basics.
There are two types of property: marital and separate. In Virginia, only marital property is distributed between the spouses.
Marital property is property acquired by either spouse during the course of their marriage. This varies from separate property, which entails property spouses obtained before entering into the marriage, or property and assets inherited by or gifted to a spouse during their marriage.
Exceptions may exist for separate property and assets used or enjoyed by both spouses during the marriage. In these cases, a judge may consider certain separate property marital property.
Virginia is also an equitable distribution state, meaning the property is distributed equitably (fairly) between both spouses. Dividing property requires consideration for the marriage and both spouses’ contributions, among other factors. After these considerations, property distribution may not equal a perfect 50/50, but rather what is fair for both parties.
Generally, whether a business is divided between the spouses depends on whether it belongs to one spouse or both, and whether it could be considered separate or marital property.
Courts will examine the business to make determinations.
So, for example, if a business’s value is based on the concept, and the wife created this business before the marriage, it may be deemed separate property and not subject to division. If, on the other hand, the business was created by the wife, but the husband’s work and contributions helped grow the business and increase its value, it would likely be regarded as marital property and require distribution.
If you and/or your spouse have a business, your divorce lawyer can review the details of your business and your marital circumstances to provide critical answers.
If the Business Belongs to One Spouse Alone
Often, when an individual starts a business before marriage, they’ll either try to keep it completely separate from the marriage, or their spouse will begin working with them after the marriage. Both options can have separate outcomes.
If any of the following are true, it’s unlikely a court will deem your business separate property, and it will be considered marital property:
When any of these scenarios apply to you and your business, it’s likely a judge will determine your business is marital property subject to distribution.
If the Business Belongs to Both Spouses
If you and your spouse own a business together, it is marital property considered during property division. This can, however, add a layer of complication to your divorce.
You or your spouse can either be bought out by the other or you can sell your business. Either option requires determining the value of the business to make sure both spouses are getting their fair share.
In a Virginia divorce involving a business, courts focus on the business’s intrinsic value. The intrinsic value of a business is subjective and looks at the value through the eyes of the spouses.
To determine financial worth, courts regularly utilize one of three methods:
It is not uncommon to rely on certain experts, including Certified Public Accountants (CPAs), to help determine the value of a divorcing couple’s business.
Curran Moher Weis has extensive experience helping clients through the most challenging divorces, including those involving businesses. We understand how difficult divorce can be on a person physically, mentally, and emotionally. Our firm aims to make the process smoother and provide our clients with care and kindness from start to finish. Contact our office today to schedule a meeting with one of our skilled Fairfax divorce lawyers.