Harrison & Medlin, P.C.
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Dealing with a business during a divorce

When people in Georgia who own businesses get a divorce, they might need to divide the companies. The first step is to get an accurate appraisal. In addition to looking at an enterprise's books, this process also involves accounting for such assets as equipment and real estate as well as intangible assets, like the company's name and reputation.

There is also a danger that one person will try to be deceptive about the company's value. This could involve inflating or hiding the total worth of the business. Another potential complication is that in a family business, some agreements could be informal, and there might not be paperwork associated with loans or other handshake deals.

Once a value for the business has been established, it is necessary to decide whether the company will be sold, kept or split. If one person is keeping the business, what sometimes happens is that the other spouse takes another asset in exchange for a share of the business. Some enterprises already have an agreement in place about what might happen in case one of the partners gets a divorce. Another consideration is taxes. These can be complex and may require a financial professional. If one spouse must use a promissory note to buy out the other, it should be for a short time frame.

Negotiating property division may involve strong emotional attachments to some of the property, such as a home and a business, and strong emotions about the divorce itself. This can cause people to make bad decisions. For example, they might rush through the negotiations to get the divorce over with and end up with a divorce agreement that is unfavorable. It is also important for people to prioritize their financial well-being during these negotiations. An attorney may be able to assist with an effective strategy during these negotiations.

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