Dividing assets in a Colorado divorce can be complicated. However, property division is especially challenging when a business is involved. Colorado is an equitable distribution state and many complex considerations and determinations must be made when a business owner divorces.
The business must be classified as separate or marital property. In many instances handled by our divorce attorneys in Denver, a business may have both marital and separate components to its value. If it is entirely or partly marital it usually must be valued so the marital component can be identified. A separate decision is whether the spouse’s interest in the business can or should be sold or continued as a source of income for one or both parties. When valuing and allocating the business, you must also consider whether the rights of third parties like business partners or other investors are also involved and whether operating agreements direct or limit how a participant can withdraw from the entity or liquidate their interest. Businesses are generally not like investment or retirement accounts which can be easily divided.
If you are considering divorce and you or your spouse own a business, you need to seek the help of an experienced complex property division attorney to protect your interests.
The Denver property division attorneys at Hogan Omidi, PC, have extensive experience representing Colorado residents with high-asset and complex property divisions. We understand the nuances of asset division for business owners and know how to negotiate a fair and equitable asset division that protects our client’s priorities.
Classifying the Business as Separate or Marital Property
Regardless of whether the business can readily be sold or liquidated, a business interest owned by either or both spouses is considered an asset. It must be classified as separate or marital property, or may be partially separate with a marital value component. If the company was owned before the marriage, or one spouse inherited their interest such as a family business, it will be considered their separate property, insofar as the value of the interest at the time it was received, if received during the marriage, or as of the date of the marriage if it was owned prior to the marriage. However, any increase in value that occurred during the marriage is considered marital property.
Dividing a Marital Property Business
In some cases, you and your spouse may agree on a fair distribution of marital property, including the business. If not, a court will divide the business interests fairly and equitably.
Factors that the courts may consider include:
- The value of the business (including any increase in value that occurred during the marriage if the business was started before it)
- Each spouse’s contribution to the business
- Each spouse’s financial circumstances
- The extent to which other assets awarded to the non-owner spouse may be used to offset the marital value
Protecting Your Business During Divorce
You need a Colorado business owner’s divorce lawyer to protect your business during the divorce and property division process. Your attorney may work with other experts when necessary to accurately value your business and help determine the most equitable way to divide all marital property.
An attorney can:
- Work with an appraiser to accurately determine the value of your business – taking into account the value of business assets, the current market, and the cash flow of the business.
- Determine what your options are and thoroughly explain them to you. This may include selling the business, buying out your spouse’s interest, trading other marital property for the market value of your spouse’s interest, or remaining co-owners after the divorce is complete
- Help you fully understand the tax implications along with any other impact that the divorce may have on both your business and your financial outlook.
At Hogan Omidi, our family law attorneys in Denver work strategically to create solutions to complex property division issues. We work tirelessly to ensure that our client’s interests are protected and they receive a fair settlement that reflects their goals.
Call us today at (303) 691-9600 or visit our contact page to schedule a consultation to discuss your divorce, family law, and property division concerns.