Protect Your Business in a Divorce
Video Transcript: Hello, everybody. I’m Dustin Peterson, a lawyer in Oklahoma.
The question today in the equitable property division segment has to do with a man who will be getting a divorce from his wife. And they began a business together, and the husband has asked me what he can expect his wife to ask for as far as the property division as it relates to the business.
So when we value a business and one spouse or the other, in this case, the husband, will retain control and operation and ownership of that business after the divorce, we can expect that the spouse who will not retain any ownership, operation, or control to ask for certain things. And typically, those will be we expect the tangible assets of the business certainly to be calculated in there, things like the real estate, the furniture, the equipment.
Those things are very easily inventoried. Where it gets tricky, though, is if a valuation on intangible assets are requested. And one of those might be the goodwill of the business.
Now, goodwill of a business is basically the expectation of continued public patronage or the expectation that, after the divorce, there will be a continued stream of income. And since both spouses were responsible for the genesis of this business, the spouse who will no longer retain ownership or control of it might ask for some continued income from that business. And the ways we might attack that are whether the goodwill is marketable.
In other words, if the goodwill of the business, the expectation for continued income from the business, is distinct from the personal reputation of the owner or operator of that business, then goodwill could be a divisible property interest.
However, if it is not distinct, in other words, if the business is predicated or any goodwill or income generated from the business is essential or relies upon the reputation of that owner, then it is not a marketable asset and not subject to division.
If you have any questions about goodwill of the business as it pertains to divorce actions and need an Oklahoma City divorce attorney, give me a call at 405-880-8222 or look me up online at oklahomacitydivorceattorney.pro.
