All but a handful of states divide marital property at divorce based on the principle of equitable distribution. Note: you don’t have to ask a court to intervene, but if you and your spouse are unable to agree on property division in Massachusetts, then the court will endeavor to equitably divide marital assets and debts. Keep in mind, though, that “equitable” is not necessarily the same thing as “equal.”
Equitable distribution can be particularly complicated when a business is involved. Business assets and debts may be included in the marital estate and thus subject to division between the spouses. In some cases, though, it is possible to prove that the business is not subject to division because the business qualifies as separate property.
If you or your spouse owns a business, then it is crucial that you obtain an accurate business valuation for the purposes of your divorce. A comprehensive valuation will take into account the value of business assets, including brand, reputation and the company’s appreciation in value over time, as well as the company’s ability to provide future income.
Additionally, what are the tax implications of letting go of or keeping business assets?
If one spouse had very little to do with the business, then it may be possible to categorize it as separate property. In that case, equitable distribution may involve dividing only the company’s appreciation in value, or the value of the business may be left entirely out of the equation.
If you would like to learn more about divorce for high net worth spouses in Massachusetts, then please see the Law Offices of Lisa A. Ruggieri’s business valuation overview.