When a married couple divorces in Florida, one of the first steps of the property division process is to divide any separate property from the marital property. Next, the spouses must divide the marital property under state law.
For the most part, there are just these two categories: separate and marital. Separate property consists of anything the spouses owned before the marriage and marital property consists of assets and debts they acquired during the marriage. However, the two categories can blur together, especially during a long marriage, creating a kind of third category.
For instance, if each spouse contributes $500 to open a savings account when they first get married, and then both of them deposit and withdraw from the account over the years, it’s hard to determine how much of that account is separate property in divorce. The law sometimes uses the term “commingled property” to refer to this third category.
Things get even trickier when it comes to more complex assets. If one or both of the spouses own a business together, property division can be especially complicated.
If one spouse owned the business before the marriage
If you and your spouse bought or started the business together, it is most likely marital property.
If you owned the business before you got married, you may presume that a court will see your business is separate property. That may indeed be the case. However, just as with the example of the savings account above, ownership in a business can be commingled with marital property.
For instance, if your spouse worked for the business, or made contributions to it during the marriage, a court may determine that they have a property interest in the business.
In either case, you must determine what percentage of the business your spouse owns, and then you must figure out what to do about it. Generally, you have three options: You can continue to run the business with your ex-spouse as part owner, you can sell the business and divide the proceeds, or you can purchase your spouse’s share.
This third option is the most palatable to many business owners, but it requires setting a value on the business. This usually means hiring a valuation professional.