Dividing business interests during divorce can affect your company’s value and ability to keep operating. Our business owner divorce attorneys in PA can help you navigate these concerns with a strategy focused on protecting your interests and the future of your company.

Marital and Separate Business Interests

Under 23 Pa.C.S. § 3501, property acquired during the marriage is generally considered marital property and is subject to equitable division during divorce. A business owned before the marriage may remain non-marital. However, an increase in the business’s value during the marriage or marital funds used to help the business may be subject to division during divorce. 

Tracing can become important when a business has both marital and non-marital interests. Our lawyers can review business documents and financial records to trace how the business changed during your marriage. Mette Attorneys at Law has extensive experience with:

• Business formation

• Ownership transfers

• Mergers and acquisitions

• Tax planning

• Business disputes

Our team’s knowledge of Pennsylvania and federal business law can help us understand the financial history of your business and present a clear picture of what may be subject to equitable distribution during your divorce.

Business Valuation

After tracing the business interests, the next step is determining what the business is worth. During a divorce, the court needs an accurate picture of the marital assets and income to divide property fairly. 

A business owner’s salary may not show the full financial benefit the owner receives from the company. Other compensation can include bonuses, distributions, and certain personal expenses paid by the business. 

The company may also use retained earnings for business expenses, potentially increasing the business’s overall value. However, not all retained earnings are automatically available to an owner or treated as personal income. 

Goodwill is the value a business has beyond its physical assets, such as a strong reputation, loyal customers, and established business relationships. This can affect the overall value assigned to a business.

A business valued too low or too high can significantly affect the outcome of the division, potentially leaving you with less than you deserve post-divorce. The valuation process involves reviewing the company’s financial records and looking at its income, expenses, assets, debts, and financial history. Our team can work closely with valuation professionals to help ensure your business is properly evaluated. 

Settlement Options

Once your business is evaluated and the court understands each spouse’s financial circumstances, the court fairly divides marital property after factoring in:

• Each spouse’s income and future earning opportunities

• Each spouse’s contributions to the marriage

• Tax consequences

A business does not necessarily have to be sold or jointly owned by both spouses. One spouse may keep the business while the other receives other marital assets or a structured payment for their share of its value. 

To reduce court involvement, spouses can use mediation to work together on property division and reach an agreement that works for both parties. This can be especially helpful when a business must continue paying employees, serving customers, and covering everyday expenses during the divorce. A rushed sale or large withdrawal of business funds could disrupt those operations. Our attorneys can help develop a property division plan that protects the company’s ongoing needs.

Protect Your Future with Our Harrisburg Divorce Lawyers

Mette Attorneys at Law combines family law and business law experience to help you understand how your business may be valued and divided. If you own a business in Harrisburg or Central Pennsylvania and are facing divorce, call 717-232-5000 or contact our business valuation divorce lawyers online today.