When couples divorce, they must divide their marital assets. Some assets are more complicated than others to divide. A business can make property division contentious in a Virginia divorce when the parties disagree on how to divide the business.
Our family law attorneys at Chowdhury Divorce Law Group have over a decade of combined experience. We help individuals and families build better lives and brighter futures in Fairfax, Virginia.
Call us today at (703) 271-6519 to schedule a confidential consultation with our Fairfax business divorce lawyers.
How Chowdhury Divorce Law Group Can Help You With a Business Divorce in Fairfax, VA
At Chowdhury Divorce Law Group, our lawyers have extensive experience handling complex divorce cases. We understand that a divorce can impact all aspects of your life, including your professional and business interests. It is essential to hire an attorney with a thorough understanding of property division laws in Virginia if you or your spouse own a business.
When you hire our Fairfax family law lawyers, you can trust we will:
- Explain how Virginia property division laws affect your business
- Work with experts to determine your business interest and calculate the value of the business
- Develop a strategy to protect your interests in the business during the divorce
- Work with you to protect your parental rights and your children’s best interests
- Use mediation and negotiation to resolve disputes without litigation whenever possible
Our attorneys have top ratings and awards from numerous legal organizations. We have perfect ratings with Justia and Avvo. We also hold an award for being a top attorney by the American Institute of Family Law Attorneys.
Contact us today for a free case review with an experienced Fairfax business divorce attorney.
Virginia’s Equitable Distribution Laws
Virginia’s equitable distribution laws govern property division in a Fairfax divorce. Marital property is divided between the spouses based on what is fair and equitable, which may not be a 50-50 division.
Factors courts consider when determining what is fair and equitable include:
- The duration of the marriage
- Each spouse’s mental and physical health
- Applicable tax consequences
- The degree to which a spouse contributed to the acquisition of property, including non-monetary contributions
- The nature of how property is used and acquired
- Each spouse’s assets, liabilities, and resources
- Whether a spouse was significantly responsible for causing the breakup of the marriage
The court may consider other factors the judge deems relevant to determining what is fair for dividing marital assets.
Dividing Business Assets in a Virginia Divorce
The first step in dividing a business is determining whether the business is marital or separate property. Only marital assets are subject to equitable division.
A business may be considered separate property if:
- You started the business before you were married; OR,
- You inherited the business during the marriage or received the business as a gift during the marriage; OR,
- You started the business during the marriage with resources that were separate property; AND,
- You maintained the business as separate property during your marriage by never commingling the assets or using marital assets to operate the business.
Maintaining the business as separate property can be challenging. Furthermore, if the business is your source of income, your spouse may claim an interest.
Calculating the Value of a Business in a Virginia Divorce
A business valuation is required for property division in a business divorce. A qualified valuation expert is often retained to assess the company’s worth, which plays a key role in equitable distribution and determining spousal support.
Three common approaches to valuing a business are:
- Income Approach: Estimates the business’s value based on future expected earnings, often using discounted cash flow models.
- Market Approach: Compares the business to recent sales of comparable companies to determine fair market value.
- Asset Approach: Calculates the business’s value based on the net value of its tangible and intangible assets.
The type of business, its structure, income predictability, and whether it involves personal or enterprise goodwill influence which method is most appropriate. The valuation outcome helps the court determine the fairest way to divide the business interest between spouses.
Methods of Dividing a Business for Property Division in a Virginia Divorce
In a Virginia divorce, you and your spouse have the opportunity to negotiate how to divide a business during the property settlement process. If no agreement is reached, the court will decide how to equitably distribute any marital interest in the business.
Four common methods for dividing a business include:
- Sell the Company: The business is sold, and the proceeds are divided according to the terms of the divorce settlement. This works well if neither party wishes to continue the business.
- Share the Company: Both spouses continue to own and potentially operate the business together post-divorce. This is rare and typically only viable when there is a strong working relationship and mutual trust.
- Buyout: One spouse buys the other’s share based on the appraised value of the business. This can be done through cash, structured payments, or third-party financing.
- Offset: One spouse keeps the business in exchange for other marital assets of similar value. This method avoids the need for financing and is often a practical solution when one spouse is more invested in the business.
Ultimately, the best method depends on the unique financial, emotional, and operational dynamics of the marriage and the business, with the goal of reaching a fair and sustainable resolution for both parties
Schedule a Confidential Consultation With a Fairfax Business Divorce Attorney
Our Fairfax business divorce attorneys at Chowdhury Divorce Law Group, work with you to protect your interests in a business during a divorce. We understand that you have worked hard to build your business. Schedule a confidential consultation with an attorney to discuss the best strategy for obtaining the divorce outcome you want.
