How Divorce Affects Business Owners in Florida: What You Need to Know

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5 days ago
7 min read

By Jarbath Pena Law Group

You’ve worked tirelessly to build your business—through late nights, personal sacrifices, and financial risks. Now that you’re facing a divorce, the thought of losing control of your company or seeing it split apart is overwhelming. You’re likely asking yourself some questions. Will I still own my business after this is over? How will a judge value it? Could my spouse end up owning part of it?

These are legitimate concerns, and you’re not alone. Many entrepreneurs feel blindsided when divorce throws their financial future into uncertainty. At The Jarbath Peña Law Group, we understand how important it is to protect your business. We’ll help you navigate this complex process and fight to get the most advantageous result possible—so you can move forward with confidence and security.

How Is My Business Valued in a Divorce?

Before the court or the parties can divide your business, you must know what it’s worth. Business valuation is a critical and often contentious step in any divorce involving a company. There’s no one-size-fits-all method. Your business might be valued differently depending on its size, industry, and structure.

Here are the three most commonly used valuation approaches in divorce cases.

Asset-Based Approach

This method adds up the total value of all your business’s assets and subtracts its liabilities. It focuses on what your business owns rather than what it earns. Some assets and liabilities the evaluator will look at include:

Tangible assets—including real estate, vehicles, equipment, inventory, and supplies;
Intangible assets—covering established customer goodwill, brand recognition, patents, trademarks, and customer relationships; and
Liabilities—outstanding loans, vendor payments, taxes owed, and other debts.

This approach is often used when a business is asset-heavy (like a construction company or manufacturer) or if the company is no longer profitable but still owns valuable property.

Income Approach

The income approach estimates your company’s present value based on its future earning potential. It’s a forward-looking method commonly applied to service-based or cash-flow-positive businesses.

Past and current earnings—are reviewed to project future profitability;
Adjustments—are made for one-time expenses, owner salary, and industry-specific risks; and
Discount rates—are applied to calculate the present value of future income streams.

This method is appealing in divorce cases because it considers the company’s ability to generate income—something that directly impacts both parties’ post-divorce finances.

Market-Based Approach

If there’s a strong market for your type of business, the market-based approach compares it to recent sales of similar companies.

Comparable company sales—provide a real-world benchmark for pricing;
Industry multiples—revenue multiples or EBITDA (short for earnings before interest, taxes, depreciation, and amortization) may be used to estimate value; or
Market conditions—such as buyer demand and competition.

These factors can influence the final valuation number. This method works well when there’s ample data on similar businesses, but it can be less effective for niche or highly specialized companies.

Getting the valuation right is crucial and often requires a forensic accountant or valuation expert. At The Jarbath Peña Law Group, we work with trusted professionals to ensure your business is valued accurately and fairly.

Is My Business Considered Marital Property or Separate Property?

Whether your business is treated as marital or separate property will determine whether it’s subject to division. But this question isn’t always straightforward.

Here’s what courts typically look at:

When you founded the business. If you started your business before you got married and didn’t involve marital assets in its growth, it might remain separate property.
How the business grew during the marriage. If you used marital funds, reinvested profits, or relied on your spouse’s unpaid contributions (such as managing the home or helping with admin work), then at least a portion of the growth could be classified as marital.
Commingling. If you commingled (combined) personal and business funds or added your spouse to business accounts, that could convert separate property into marital property.
Involvement of your spouse. Even if your spouse didn’t work in the business full-time, their indirect support could be factored in. Indirect support includes things like providing childcare, emotional encouragement, or taking on extra home responsibilities to free you up for business concerns.

In many cases, a business that starts as separate property ends up having a marital component. A skilled divorce attorney can help you draw clear boundaries and make strong arguments to protect your interests.

How Does Divorce Impact the Ownership of My Company?

The structure of your business and the agreements you had before or during marriage play a major role in how the court handles ownership during a divorce.

Key factors that influence business ownership in divorce include the following.

Ownership structure. If your company is a sole proprietorship, you technically own it, but that doesn’t stop your spouse from claiming a share of its value. If it’s an LLC or corporation, bylaws or operating agreements may dictate whether a non-owner spouse can gain a company interest or whether they must buy out your interest.
Prenuptial or postnuptial agreements. If you and your spouse signed a valid agreement that outlines who owns the business, courts will usually enforce it. Courts typically reject such agreements only if the judge finds them unfair or improperly executed.
Marital property laws. Florida is an equitable distribution state where courts divide marital property fairly but not necessarily equally. That means you might have to give up other assets—like a house or retirement funds—to keep full ownership of the business.
Business agreements. Some company operating agreements contain provisions that limit the transferability of shares or require valuation formulas if a divorce occurs.

Understanding how these elements intersect helps us craft a legal strategy that protects your control over your company.

What Happens If My Spouse and I Own the Company Together?

If you and your spouse co-own the business, you face both legal and emotional challenges during divorce. Ownership disputes can stall operations and damage company value.

You have several possible paths forward:

One spouse buys the other out. A buyout is often the cleanest option. You or your spouse keeps the business, and the other receives compensation—either through a cash payment or in exchange for other marital property.
Sell the business and split the proceeds. If neither party can afford to buy the other out, or if the business can’t survive without both of you, selling might be the best option.
Continue co-owning the business. This requires a high level of cooperation and clear boundaries. Some ex-spouses successfully run businesses together, but it’s rare and usually limited to very amicable splits.

We help you explore the best route for your unique circumstances and draft agreements to avoid future conflict.

Dividing My Company: What Are My Options?

The court doesn’t have to order you to split your business. Judges often look for practical alternatives that preserve the value of the company.

Common strategies include:

Buyout. One spouse pays the other for their share of the business. Sometimes a spouse will use cash, but more often they use other assets to offset the value.
Structured settlement. If a lump-sum buyout isn’t feasible, you might negotiate installment payments over time, often with interest.
Asset trade. You could keep the business in exchange for giving up rights to other marital assets like the house, a car, or retirement funds.
Co-ownership agreement. This type of agreement is rare but possible. It should include terms for management, profit-sharing, and what happens when and if one party wants out.

Each option comes with pros and cons. We’ll walk you through them and help you make the best financial and legal decisions.

Tax Implications of Dividing a Business

Dividing a business in a divorce isn’t just a legal issue—it’s also a tax one. Failing to plan for tax consequences can turn a fair settlement into a costly mistake.

Consider the following:

Capital gains taxes. Transferring ownership to your spouse may not be taxable now. However, if they sell their share later, they could owe capital gains taxes.
Depreciation recapture. If you transfer equipment or property, there may be tax consequences that reduce your overall tax return.
Business structure changes. Divorce-related changes in ownership can trigger new tax filing requirements or end certain tax elections (like S-Corp status).
Loss of deductions. After divorce, you might lose business deductions if your spouse was a paid employee or worked informally in the company.

We work closely with tax professionals to minimize risk and make sure your divorce settlement doesn’t come back to haunt you at tax time.

Other Important Legal Considerations

Divorcing when you own a business introduces layers of legal complexity beyond simple property division. Let’s discuss three areas you should address.

Prenuptial and Postnuptial Agreements

If you had the foresight to sign one of these agreements, you may already be clear about what happens to the business. However, not all agreements are airtight, and some get challenged in court. We review these documents carefully to either enforce or contest them.

Business Debts and Liabilities

Dividing a business includes dividing its debts. If your spouse co-signed a business loan or is listed as a guarantor, you may both remain liable—even after divorce. We help ensure that your settlement addresses responsibility for repayment and protects you from future surprises.

Non-Compete and Confidentiality Agreements

If your spouse played a significant role in your business, you may want a non-compete agreement to prevent them from launching a competing business. You should also consider a non-disclosure agreement to protect sensitive company data.

Get the Legal Support You Need

You’ve invested too much in your business to let divorce jeopardize everything you’ve built. The decisions you make now will affect your company’s future and your own financial well-being for years to come.

At Jarbath Peña Law Group, we understand how deeply personal this situation is. We know the law, the local courts, and many of the attorneys and judges who handle these cases. We’ll walk beside you every step of the way and fight to protect what matters most—your business, your livelihood, and your peace of mind.

Call us today to schedule your consultation. Let us help you move forward—strong, prepared, and in control.