The more property that spouses share with one another and the higher their marital standard of living, the messier divorce proceedings may become. Spouses often disagree about the most appropriate means of dividing their assets and responsibility for their shared debts.
When they cannot resolve their disputes, litigation may become necessary. Under Indiana’s unique property division statutes, business holdings owned by either spouse are potentially divisible when couples divorce. What kinds of conflicts often arise when the marital estate includes a business?
Valuation disagreements
It is relatively common for businesses to fluctuate in fair market value depending on factors ranging from their reputation with the community to the market conditions. Given that there are many different valuation methods and that one spouse may want to keep the valuation low to preserve equity while the other may want the valuation high to maximize their leverage during negotiations, disagreements about valuation are common.
Disputes about equity
If one spouse wants to keep the company, they may need to take out a loan to withdraw some business equity to compensate the other spouse. Barring that, concessions and other aspects of the property division settlement are often necessary to balance the value of retaining the business. Spouses may disagree about how to address equity and also what portion of equity each spouse should receive.
Working with an experienced divorce lawyer can help people understand what their assets are worth and protect their finances as they navigate the early stages of a divorce. Business owners and their spouses are among those most in need of legal guidance in the early stages of the divorce process due to the complexity of their holdings.