Just as with real estate, debts, and other assets, businesses can be considered as marital property during a divorce. As such, Connecticut residents who are dissolving a marriage may have to split a portion of their business ownership with their ex-spouse. However, the stipulations behind this division can vary from case to case, depending on the circumstances behind the split. If you’re a business owner—or married to one—here a few important details you can expect to discuss with your divorce attorney.

What’s the Process of Dividing Business Assets in a Divorce?

Determine the Type of Property

If the business was started during the marriage or supported by both spouses, it will be considered marital property. In Connecticut, all marital property is viable for division.

If the business was founded before the marriage or was inherited, it may be considered separate property. Connecticut law stipulates that separate property may still be divided during a divorce depending on the specific circumstances surrounding the assets.

Conduct Valuation

Before the division of assets, divorce attorneys will arrange a total valuation of assets, including that of the business. This information will help ensure that a fair and equitable split is made. During business valuation, a monetary figure will be decided to represent the value of the real estate, profits, and other assets. 

Consider Mediation

Divorce mediation is a simpler way of dividing assets in a manner that is agreeable to both parties. It is also less expensive and less time-consuming than court proceedings. If you are not involved in a contentious divorce, mediation may streamline the distribution of business assets.

Court Orders Terms of Split

If spouses cannot agree on how to split a business, the court will make the decision. Since Connecticut is an “all property equitable division state,” business assets may not always be divided in a 50-50 split. Instead, the judge will determine how much each party should retain in a way that properly reflects the situation.

What Will Happen to the Business?

If one party wants to continue owning the business but does not want to keep their ex-spouse involved, their divorce attorney may arrange a buy-out. A buy-out is when the owning party pays the other party the lump sum of what their share would be.

Other options include selling the business entirely to a third party and dividing the profits. If the split is amicable, the couple may also opt to co-own the business.

While equitable distribution during divorce can be difficult to navigate, The Law Offices of Conti, Levy and Salerno, LLC. offers comprehensive support to guide clients through the process. Practicing family law in Litchfield County, CT, these experienced divorce attorneys will work to ensure all assets—including businesses—are divided fairly and equitably per Connecticut law. Visit this Torrington legal firm online to learn more about their solutions, or call (860) 482-4451 to discuss your options with a compassionate attorney.