Divorce can be a complex process, especially when it comes to dividing business assets. In Nebraska, understanding the legal considerations and steps involved is crucial to ensuring a fair outcome. Hathaway Law Group, P.C. L.L.O. has decades of experience handling business divisions in Nebraska helping many clients obtain a favorable divorce outcome.
There's a common misconception that businesses in divorce cases are divided in a straightforward 50/50 manner. However, in Nebraska, the reality is quite different. The state follows the principle of equitable distribution, which means that the division of business assets isn't automatically a 50/50 split. Instead, it considers all crucial factors to ensure a fair outcome.
Equitable distribution of property means that the property being discussed will be divided in a just manner based on circumstances and facts regarding the marriage. Generally, only property that was acquired during the marriage will be considered for distribution; separate or premarital property of either spouse may not be considered in the distribution if certain facts exists.
It is important to note that equitable distribution is what a judge will follow when making her decision when required to divide the property of the marriage. A divorcing couple can in many circumstances do whatever they wish as to their property division if they work out a property settlement agreement between themselves.
The Nebraska court's division of property is based on several factors, including the duration of the marriage, each party's contributions to the marriage (including child care and education), career or educational sacrifices, and the supported party's ability to find gainful employment without affecting the interests of any minor children in their custody.
Methods for Dividing Business Assets in Nebraska Divorce
When it comes to dividing a business interest during a divorce in Nebraska, the challenge lies in determining the true value of the business. Unlike distributing tangible assets like vehicles, businesses have unique complexities that demand careful consideration. Fortunately, there are three common methods that most couples use when navigating this intricate process:
The buyout method is perhaps the most frequently used. In this scenario, one spouse essentially buys the other spouse's interest in the business. It's worth noting that the buying spouse doesn't necessarily need to have all the cash on hand for the buyout. The lawyers at Hathaway Law Group, PC LLO can help you find ways to leverage other assets or debt to effect the buyout. Assets such as investments, retirement accounts, other liquid assets and debt can be used to create an equalization or the net marital estate.
Another approach is to continue jointly owning and operating the business post-divorce. This is a viable option if both spouses are amicable and wish to maintain a working relationship. In some cases, one spouse may continue to run the business while the other receives payments from future business proceeds to compensate for their share of the marital asset. However, this approach can be risky if the business's profitability declines.
Co-ownership isn't commonly chosen, as it requires maintaining a productive working relationship after divorce, which can be challenging for many couples.
Sell the Business
If neither buyout nor co-ownership is feasible, the best way to ensure fair compensation for each spouse's interest in the business is to sell it and divide the proceeds. This method may be used as well for many other marital assets such as, the marital home, investment property, vacation homes, and investments.
However, selling the business presents its own set of challenges. Finding a buyer, especially for obscure or small owner-operated businesses, can take time. Disagreements over the business's value can also complicate matters. Additionally, if one spouse’s income and career is tied to business they may resist selling it.
When deciding how to distribute a business interest in divorce, these three methods offer flexibility, but each comes with its own set of pros and cons. Spouses should carefully consider their unique circumstances and priorities before selecting a distribution method. Consulting with our legal experts can provide valuable guidance in making this crucial decision.
Navigating the intricacies of dividing business assets during a divorce requires expertise in family law and a deep understanding of Nebraska's legal landscape. Our experienced legal team has decades of experience helping clients in similar situations. We are here to provide you with the guidance and support you need to navigate this complex process and achieve a fair resolution.