Can My Spouse Claim a Share of My Business in a Divorce?

Divorce is often a complex and emotional process, particularly when significant assets such as a business are involved. For business owners, one of the most pressing concerns is whether their spouse can claim a share of the business as part of the divorce settlement.

In Florida, equitable distribution laws govern how assets and debts are divided during a divorce. This means that while marital property is divided fairly, it is not necessarily split equally. Understanding how equitable distribution applies to businesses can help business owners and spouses alike navigate the legal process and protect their financial interests.

Consult a Boynton Beach business owner divorce lawyer to explore whether a spouse can claim a share of a business in a Florida divorce, how equitable distribution works, and what business owners can do to protect their assets.

Understanding Equitable Distribution in Florida Divorce

Florida follows the legal principle of equitable distribution under Florida Statute § 61.075. This means that all marital property is divided fairly but not necessarily equally. When determining asset division, courts consider factors such as each spouse’s contribution to the marriage, financial circumstances, and future earning potential.

When it comes to business ownership, the key question is whether the business is considered marital property or separate property. The classification of the business will determine whether it is subject to division in a divorce.

Is My Business Considered Marital Property?

1. Businesses Started Before Marriage (Separate Property)

If you owned your business before you got married, it may be considered separate property, meaning your spouse may not have an automatic claim to it. However, if the business increased in value during the marriage due to your spouse’s contributions—whether direct (such as working for the business) or indirect (such as supporting you while you built the business)—a portion of that increase in value may be considered marital property.

2. Businesses Started During Marriage (Marital Property)

If the business was founded during the marriage, it is generally considered marital property, even if only one spouse runs the company. This means that the business is subject to equitable distribution, and your spouse may be entitled to a portion of its value.

3. Mixed Property (Separate & Marital Property Combined)

A business may have elements of both separate and marital property. For example, if a business was started before marriage but continued to grow and increase in value during the marriage—especially if marital funds were used to support the business—it can be partially marital property.

To determine what portion of the business is marital property, courts may look at:

• Whether marital funds were invested in the business.
• Whether the spouse contributed labor or expertise to the business.
• Whether the business’s growth during the marriage was due to active efforts or passive market factors.

How Do Courts Value a Business in Divorce?

If a business is subject to equitable distribution, the court must determine its fair market value. This process can be complex, especially if the business has significant assets, debts, or fluctuating revenue.

Courts may use different methods to determine the value of the business, including:

• Asset-Based Valuation – Evaluates the business’s assets and liabilities.
• Income-Based Valuation – Determines the business’s value based on income, profits, and cash flow.
• Market-Based Valuation – Compares the business to similar businesses that have been sold.

Business valuation often requires forensic accountants, financial experts, or appraisers to provide an accurate assessment.

Can My Spouse Take Over My Business?

In most cases, courts do not force a business owner to sell or give their spouse ownership of the company. Instead, if the business is classified as marital property, the court may:

• Award the spouse a financial share of the business’s value rather than physical ownership.
• Adjust the division of other marital assets (e.g., giving the spouse a larger share of savings, real estate, or investments in exchange for keeping full ownership of the business).
• Arrange a buyout where the business owner pays their spouse a lump sum or structured payments over time.

The goal of the court is to ensure that both spouses receive a fair and equitable distribution of assets while allowing the business to continue operating.

How Can a Business Owner Protect Their Business in a Divorce?

1. Prenuptial or Postnuptial Agreements

A prenuptial or postnuptial agreement can specify whether a business is separate property and prevent it from being divided in a divorce. These agreements must be legally drafted and signed by both parties to be enforceable.

2. Keeping Business Finances Separate

Using marital funds to support your business can blur the line between separate and marital property. Keeping business and personal finances separate can help protect the business from being classified as marital property.

3. Paying Your Spouse a Salary

If your spouse works for the business, paying them a salary rather than allowing them to claim an ownership interest may help distinguish their financial involvement.

4. Using a Buy-Sell Agreement

A buy-sell agreement with business partners can establish what happens if an owner goes through a divorce. Some agreements include provisions that prevent a spouse from claiming a share of the business.

5. Trusts or Corporate Structures

Incorporating a business as an LLC, S-Corp, or trust can sometimes help protect assets from division in a divorce, though courts may still evaluate whether marital funds were used in the business.

What Should I Do If My Spouse Wants a Share of My Business?

If you are facing divorce and own a business, the first step is to consult an experienced family law attorney who understands Florida’s equitable distribution laws. An attorney can help:

• Assess whether your business is marital or separate property.
• Ensure accurate valuation of the business.
• Negotiate a fair settlement that allows you to retain control of the business.
• Protect your financial interests through legal strategies such as structured buyouts or property offsets.

Protecting a business in divorce requires careful legal and financial planning. The sooner you seek legal guidance, the better your chances of achieving a fair outcome.

Contact the Law Offices of Taryn G. Sinatra, P.A.

Dividing a business in a Florida divorce depends on whether it is classified as separate or marital property. If the business was started before marriage, it may remain separate property—unless it was commingled with marital funds. If the business was founded during marriage, it is generally considered marital property and subject to equitable distribution.

Although a spouse may be entitled to a financial share of the business, courts typically do not require the business to be sold or transferred. Instead, solutions such as buyouts, financial offsets, and structured payments are often used to ensure fairness while allowing the business to continue operating.

If you are a business owner facing divorce, seeking legal guidance early is crucial to protecting your assets and ensuring a favorable outcome.

At the Law Offices of Taryn G. Sinatra, P.A., we specialize in divorce cases involving business assets and complex property division. Our team understands Florida’s equitable distribution laws and can help you protect your financial interests while ensuring a fair settlement.

Contact us today for a consultation and let us help you navigate your divorce with confidence.

Sources:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0061/Sections/0061.075.html

businessappraisalflorida.com/blog/a-guide-to-business-valuation-for-a-florida-divorce/

jdsupra.com/legalnews/marriage-divorce-the-family-business-6733363/