Post-Divorce Estate Planning Attorney in Washington, D.C. Assisting Clients in Planning For The Future

If you own or are a partner in a District of Columbia business, you must understand your rights and how your soon-to-be former spouse could benefit from the divorce process. Even if your spouse has no legal interest in the business, it may still be considered marital property. If it is determined to be marital property, it would be subject to the property division process under D.C. laws.

Even if your spouse did not actively build the business, you may still have to deal with legal issues related to property division. The District of Columbia is an equitable distribution jurisdiction. Equitable distribution means the division of property must be fair but not necessarily equal.

If you and your spouse cannot reach a mutual resolution on how the business and its property and debts should be divided, the court will make the decision on its own. For this reason, it is in your best interest to hire a skilled post-divorce business formation attorney who can protect your hard-earned assets and help you begin the next chapter of your life.

Contact The Father’s Rights Firm of Washington, D.C., and ask to schedule a strategy session to discuss your case and learn what legal options may be available.

How Are Businesses Valued During a Divorce?

Business valuation in divorce proceedings is the process of determining the value of the business solely or jointly owned by one or both spouses. Business valuation is one of the key aspects used to decide the value of the marital property that must be divided through D.C.’s equitable distribution laws.

Therefore, it is crucial that business valuation is accurate to ensure that you and your spouse obtain a fair settlement that is favorable to both parties. Several methods can be utilized to determine the overall value of a business for divorce, which include:

Income-based valuation: This business valuation method is typically used when estimating the value of a well-established business with a proven track record of success. The value of the business is calculated based on the projected cash flow and profitability.
Asset-based valuation: This business valuation method is determined through an inventory and estimated value of company assets. Assets that are evaluated generally include property, investments, inventory, equipment, investments, and the amount of debt the company carries.
Market-based valuation: This business valuation method compares the business in question to other similar businesses that have been sold. The business’s overall value is determined by analyzing what other equivalent businesses have sold for in the past.

To better understand which form of business valuation may be appropriate for your circumstances, contact The Father’s Rights Firm to meet with our experienced attorney. Our legal team can evaluate your situation and determine the best option for you.

Does My Business Have to Be Divided With My Former Spouse?

Under D.C. law, spouses are required to split marital property fairly. The marital property would include businesses even if your spouse was not a partner or active participant. However, the court will consider each spouse’s role in building the business.

After an appraiser has determined the overall value of the business, the court will evaluate several other factors before dividing the business between the two spouses.

Some of the most common factors that the court will take into consideration include:

If the business existed prior to the marriage.
If one spouse borrowed funds from family members to purchase necessary items for the business.
The involvement of each spouse in the day-to-day operations of running the business.
The professional qualifications each spouse brings to the business.
The ability for each spouse to earn a similar income if no longer involved in the business.
How other marital property, assets, and debts are to be divided between the spouses.

What Can I Do to Protect My Business Interests in D.C. Divorce?

There are several proactive steps that you can take that will help protect your assets and business should your marriage end in a divorce.

For example, a prenuptial or postnuptial agreement is an excellent method for determining guidelines regarding how a business will be divided should there be a divorce. Of course, a prenuptial agreement needs to be signed before a marriage takes place. However, a postnuptial agreement can be executed after the two parties are married to help decide issues that may prove to be contentious later.

Both a prenuptial or postnuptial agreement can set forth stipulations as to how the business will be valued and its assets ultimately divided.

Some other methods that can be used to protect your business before a divorce action can take place include:

Legally establish yourself as the sole owner of the business.
Structure the organizing documents for your business to stipulate that it cannot be transferred in the event of a divorce and that only a cash award can be given to your former spouse.
Keep all business and personal expenses separate so you avoid scrutiny when the appraiser comes to determine the value of your business.
Keep detailed and accurate records of any sources of revenue and capital utilized by the business. Be sure to make note of any premarital funds that were used to pay business expenses.

What Makes Your Law Firm Stand Out Above the Others?

The Father’s Rights Firm is a law firm dedicated to helping men protect their businesses while working to reach a settlement that is favorable to all parties involved in a divorce. We understand that you may be feeling overwhelmed and anxious at the possibility of losing your business or having to pay a substantial sum of money to your former spouse.

For this reason, our entire legal team is passionately committed to working with you to provide the legal advice you need to feel confident about the future. If we agree to take your case, we will review all of your financial and business records to determine how much your business is potentially worth. Then, we will negotiate with the other party to reach a financial settlement that leaves each side feeling satisfied with the outcome.

If you would like to learn more about how to protect your business in the event there is a divorce, contact The Father’s Rights Firm of Washington, D.C. today. We will gladly review legal strategies that can help you protect your hard-earned assets and allow you to keep your business.

Contact our law offices at 1-877-CUSTODY to schedule a strategy session to learn how we may be able to help you.