We ‘Wrote The Book’ On Divorce In Hawaii
Who Owns The Business In A Divorce?
When divorce involves a family business, the first step is to determine whether it qualifies as separate or marital property. The issue can be complicated.
If you owned the business prior to the marriage, it is separate property. However, your spouse may be entitled to reimbursement if you used marital funds to increase the value of the business, or your spouse made labor-related contributions to the success of the business. Your spouse may also be entitled to appreciation in the value of the business during your marriage.
If the business started during the marriage, it is marital property regardless of who started or operates the business.
Equitable Distribution Of Your Business
If all or a portion of your business is marital property, it is subject to division. Hawaii is an equitable distribution state when it comes to dividing assets in a divorce. This means that you may expect a fair portion of the marital assets, not necessarily an equal one. This applies to every asset in your divorce, including your business.
To ensure that the division of the business is fair and equitable, you need a valuation of it. This requires the help of a business valuation expert and possibly a forensic accountant. Relying on the other party to tell you the value of the marital portion of the business would be unwise.
After receiving a professional valuation, you must then determine how you wish to divide the business. Selling it may not be an option, as both of you may rely on the income it generates. Our lawyers can help you reach an equitable settlement. Whenever possible, it’s better for the two parties to reach a settlement rather than have a judge publicly decide the issue in court.
Taking Advantage Of Experienced Support
The attorneys at Coates Frey Tanimoto & Gibson understand the challenges you face in protecting the future of your business. Contact us at 808-524-4854 or complete our simple contact form to schedule a complimentary initial consultation. From our office in Honolulu, we serve clients on all islands of Hawaii, including Oahu, Kauai, Molokai, Lanai, Maui and the Big Island.