Going through a divorce is always a complicated process, and it can be even more challenging when there are ownership interests in a business that need to be accounted for. Whether you are a sole proprietor, whether you and your spouse shared interest in a business, or whether you are a part-owner with others, some or all of the value of your business could be considered a marital asset in Colorado.
In this scenario, you need the advice and clarity that only an experienced family law attorney can provide. You need Halligan LLC.
At Halligan LLC, we understand that you’ve worked hard to get to where you are in life. Now you might find yourself in likely unfamiliar territory because your marriage didn’t work out the way you had planned. A divorce doesn’t necessarily mean the end of everything for which you have worked and built. Our firm can protect your future and ensure a fair outcome in the divorce process.
If you have questions about the status of your business when dividing marital assets, especially if it may necessitate a buyout, call Halligan LLC at (720) 608-2361 or contact us online. We offer a free consultation with one of our experienced family law attorneys. At Halligan LLC, family law is all we do.
What Does a Divorce Mean for My Business?
Colorado is an equitable distribution state. Equitable distribution means that the courts divide the marital property and assets equitably, or “fairly,” depending on a variety of factors, including (but not limited to), each spouse’s financial resources, income, and what each spouse brought to the marriage in terms of income, childcare, and other relevant factors.
It is often necessary to obtain a valuation of the business itself to divide marital assets consistent with Colorado law. The process can be complicated and legally intricate. The book value of the business is usually not enough to determine what it is really worth. Earnings may be an important factor.
Other factors like the value of equipment, inventory, investments, future demand and growth, financial background, and accounts receivable, and intangibles like goodwill can also be included when determining the value of a business.
These are just a few of the challenges that a business owner must face when it comes to divorce. Taking all of this information into consideration, you may be worried that there isn’t much of a future for your business. That doesn’t have to be the case if you are represented by an attorney well-versed in Colorado family law.
Can a Buyout Save My Business?
Separating from a spouse and managing a business can look daunting. If you want to see your business continue to thrive, if it is the main source of your livelihood, or it is simply just your passion, you do have options.
A buyout may be an option that you want to consider, depending on your particular situation. One of the big problems that emerge when married business owners consider a buyout is the upfront cost of the buyout itself. A knowledgeable and experienced family law attorney at Halligan LLC can thoroughly outline your options if you think a buyout is the right move.
If you lack the upfront cash for a buyout s, an attorney may be able to negotiate an agreement to allow you to keep the business in lieu of other marital assets. Making payments over time instead of in one lump sum is another option.
Taking out a loan against the business for a buyout to make sure your business never skips a beat may be another possibility.
Selling the business to split the proceeds is also conceivable, but usually not necessary.
The challenges aren’t insurmountable; you do have viable options that can keep the doors to your business open and in your capable hands. A seasoned family law attorney who has dealt with these types of cases can offer professional advice for making sure what you’ve worked for can endure.
Frequently Asked Questions About Business Buyouts in Divorce
The team at Halligan LLC can enable you to successfully navigate the high-stakes process of structuring a divorce-related business buyout. With that in mind, here are some frequently asked questions from our family law clients.
Can an attorney help me determine if a buyout is a viable option for my business?
An experienced family law attorney can sit down with you to review all aspects of your business and determine the most effective option for your financial circumstances. A buyout may be the right path for you, and an attorney can guide you down that road.
How is the value determined for a private business?
Because a privately-owned business will not have publicly traded shares on an exchange like the NASDAQ or the New York Stock Exchange, determining value can be a bit more challenging. The fair market value will typically be determined through one of three approaches:
- Income approach
- Asset approach
- Market approach
If your business has significant value, it may be necessary to engage the services of one or more independent qualified value professionals to help determine the fair market value of your business.
Your divorce counsel may recommend that you consult with professionals including:
- Certified Business Appraiser (CBA)
- Accredited Senior Appraiser (ASA),
- Certified Public Accountant (CPA) with an Accredited in Business Valuation (ABV) designation
Contact Us Today
At Halligan LLC, our practice is solely focused on family law. That means our experienced attorneys aren’t dividing their time among different aspects of legal practice. We thoroughly understand Colorado divorce law and strive to make sure that we are protecting your rights and your livelihood.
A divorce can be a traumatic and painful life event as it is. Don’t compound the hurt by losing your business. You have choices, and our attorneys can guide you in identifying a customized solution for your situation.
Contact Halligan LLC today for a free consultation with one of our dedicated family law attorneys who will provide you with aggressive advocacy. The end of a marriage doesn’t have to mean the end of your business. Call (720) 608-2361, and let’s get started protecting your future.