Protecting a Rhode Island Business in Divorce While Ensuring a Fair Distribution of Assets
When one or both of the spouses operates a Rhode Island business, the divorce settlement negotiations will need to include several additional considerations:
- Is the business itself a marital asset?
- If it is primarily the property of one spouse, does the other spouse have any valid claim on the business?
- What is the value of the business, its property, and its brand?
- What is the least damaging way to divide a business during divorce so the non-operating spouse gets his or her share of the value of the business while allowing the business to remain viable?
If your Rhode Island divorce will include the division of equity in one or more businesses, you will benefit from working with a highly experienced Providence divorce attorney like Stephen G. Linder.
Mr. Linder has received an AV rating* in the Martindale-Hubbell peer-review rating system for legal ability and high ethical standards. He has more than 30 years of experience handling complex divorce cases in Rhode Island, including divorce cases involving family businesses, legal or medical practices, and franchises.
Valuation of a Business
A thorough valuation of a business will include business real estate, inventory, assets (including intellectual property assets), and receivables. Mr. Lindner works with an accountant and/or business appraiser using several different methods to arrive at an appraisal amount.
For many types of businesses, the "goodwill" that accrues to the business because of its long-standing and place in the business community is also considered a business asset that can be divided. But there are some exceptions. For example, when a spouse operates a private practice such as a law firm or a medical office as an individual, that goodwill may be inseparable from the person. It cannot be divided.
The Mixing of Business Assets and Personal Assets
It is not uncommon in small and mid-sized businesses for business assets and personal assets to sometimes become mixed. This can complicate a divorce. Indeed, there are times when the mixing of business and personal is intentional and it is meant to hide assets and mislead a spouse.
Attorney Linder has handled cases in which a business-owning spouse attempted to hide income within the business – purchasing personal property using business funds or hiding money as retained earnings of the business. If you suspect that your spouse is hiding assets, our firm has experience using forensic accountants to dig into business records and tax returns.
Whether you anticipate an easy and amicable divorce settlement or a bitter court battle, attorney Linder has the skills and experience to represent you successfully. Contact our Providence law office to schedule a consultation.
*AV, BV, and CV are registered certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer-review rating process. Ratings reflect the confidential opinions of members of the Bar and the Judiciary. The Martindale-Hubbell rating system includes two categories - legal ability and general ethical standards.