The division of a family-owned business during a divorce in Massachusetts is often exceedingly complicated. The outcome will depend upon when and how the business was acquired, whether both spouses worked in the business during the marriage, whether the business will be retained by one party or sold outright, and whether the retaining spouse will be using income the business generates to pay support to the departing spouse.
Is a Family-Owned Business Considered a Marital Asset in Massachusetts?
In many instances, a Massachusetts Probate and Family Court will view the business as a marital asset subject to division. Unless the parties have an agreement as to the value of the business, its value may need to be determined by a forensic accountant or business appraiser. This process can be expensive, invasive, and time-consuming.
How Is a Family-Owned Business Valued During Divorce in Massachusetts
Further complicating the business valuation process is the fact that many family-owned businesses provide benefits to their owners beyond a weekly paycheck. These may include expenses that are both business and personal, such as a car payment or the cost of the owner’s cell phone.
These factors can make determining the value of a family-owned business during a Massachusetts divorce particularly challenging.
Dividing a Family-Owned Business Through Divorce Mediation
As with many matters couples must resolve during a divorce, dividing business assets can often be best accomplished through divorce mediation.
The couple can consider the income the business provides and how that income will support the retaining spouse while also generating support for the departing spouse and the couple’s children.
The parties can also consider the assets the business owns and what their value might be. If the couple has been working with an accountant they trust, that accountant, while not performing a full audit, may be able to recommend a reasonable valuation range for the couple to consider.
Massachusetts Divorce Mediation and Business Division
At Newburyport Family Law & Divorce Mediation, we appreciate the complexity of dividing a family-owned business during divorce and work to help mediating couples explore creative ways to fairly divide their interests.
For litigating couples, we have access to both forensic accountants and business appraisers who can provide a business valuation for the court to consider when ordering a division of marital assets.
Considering Divorce and Own a Family Business?
Contact Newburyport Family Law & Divorce Mediation to learn how we can help you navigate the division of business assets through mediation or divorce litigation in Massachusetts.