Divorce can be a complex and confusing process, especially in cases where businesses are owned by the divorcing couple. In Nebraska, it is essential for the successful outcome of your case to understand all legal considerations in the protection and division of any business assets involved in the marriage. This calls for the legal assistance and knowledge of an experienced Lincoln divorce attorney.
One of the most contentious topics in any divorce involves property and asset division. This can become even more complicated and heated when a business is involved. No matter who ends up with ownership, the business itself must be valued during the division of property in any divorce. However the valuations turn out, they can have severe impacts on the outcome of the divorce settlement, so you may wonder how the business will eventually be split.
How Is a Business Split in a Nebraska Divorce Case?
It can be a common misconception to believe that all business assets involved in a divorce will be split evenly between the couple. This is rarely the case. Nebraska adheres to strict guidelines on the division of property, known as equitable distribution. This phrase means that the division of assets, including a business, will not be automatically split evenly. Instead, a set of factors will be considered to ensure that the split is equitable.
The judge who presides over your case will use the principle of equitable distribution when making a final ruling over the split of all assets and property, including the business. However, the divorcing couple can negotiate the terms of this division outside the courtroom. If they do, the judge will usually uphold the agreement instead of issuing a ruling.
In Nebraska, the following factors are taken into account when determining the equitable distribution of marital assets:
- The duration of the marriage
- The contributions of each party to each other’s careers or education
- The contributions of each party to the marriage overall, including childcare
- Any interruptions that one party suffered to their career or education
Ways to Valuate Your Nebraska Business
If there is a business asset owned in your marriage, it is vital that the business be properly appraised and valued. Enlisting a professional to do this can ensure that it is done accurately and by a third party who holds no interest in the business or the divorce. A typical business valuation is done in one of the following three ways:
- Market-Based: The market-based valuation method can determine what the fair market value of the business is when compared against other similar businesses. This method tends to be more accurate in business areas where there are common and clear sales occurring.
- Asset-Based: This method for valuing a business bases itself on valuing all its assets while subtracting any liabilities or debts. However, this method does fail to account for any future earnings of the company.
- Income-Based: While using this method, the value is discovered by calculating the business’s income and earnings. This is the easiest method, but it can prove to be inaccurate if there is not enough financial data to back up the findings or if the business itself suffers a huge amount of debt.
Methods for Business Asset Division in Lincoln, NE, Divorce Cases
Business asset division is a tricky and complicated process, even when a value has been given to the business by an outside professional. Unlike the division of more concrete assets, like vehicles, bank accounts, and real estate properties, business divisions have more complexities involved. However, three methods are commonly used to navigate the process after the business has been valuated. These include:
- Buy-Out: Perhaps the most frequently used option, the buyout method of business division occurs when one spouse buys out the other’s interests in the business.
- Co-Ownership: Another way to make a determination on a business division is by continuing to co-own and operate the business. This is a good option for spouses who can remain amicable and maintain a working relationship.
- Business Sale: If neither of the above options is possible, the only way left to ensure that both parties receive fair compensation is through selling the business and dividing the proceeds.
FAQs
Q: How Are Assets Typically Split in a Divorce?
A: Nebraska views all asset division in divorce cases through the lens of equitable distribution. This means that not everything will end up being an equal split, which is rarely ever the case. Instead, the courts will take certain factors into consideration when making determinations on the division of assets. These factors can include the income of each spouse, their overall contributions to the marriage, and how they acted and conducted themselves during the marriage.
Q: How Much Does It Cost to Hire a Lincoln Divorce Lawyer?
A: In Nebraska, it can be difficult to assign an exact estimate of how much a divorce lawyer might charge. There are often several deciding factors involved in the final cost analysis. These might include the complexity of your case and business asset division, how cooperative your spouse and their legal team are, and how seasoned your attorney is.
Q: How Can I Protect My Business From Divorce?
A: There are certain things you can do to protect your business from your impending divorce. However, some of these methods might need to be implemented before the divorce process begins. You could:
- Form a separate business entity or a trust.
- Utilize marriage arrangements, like any prenuptial or postnuptial agreements.
- Avoid using jointly held funds to pay for business expenses.
Q: How Can I Prepare for a Business Valuation During a Divorce?
A: When you decide to work with a professional appraiser, they can come in and make a determination on the value of your business. There are several things you will want to gather to better prepare for the appraisal. You will want to have on hand copies of all:
- Financial statements
- Tax returns
- Payroll information
- Bank account information
- Documents pertaining to any debts
Contact a Trusted Lincoln, Nebraska, Divorce Lawyer Today
Determining how to split business assets during a divorce can be a complex and overwhelming task to take on by yourself. You need the assistance of someone who understands the intricacies of both family law and Nebraska’s equitable distribution requirements. At Stange Law Firm, our attorneys are standing by, ready to help. Contact our offices to schedule a consultation today, and let us help you protect your business interests.
