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Equitable Distribution—What Business Owners Need to Know


Whether you are a business owner, or your spouse is a business owner, divorce may throw a curveball in your direction because of that business. Business owners need to be aware of Pennsylvania’s equitable distribution laws, which state that all marital assets must be divided fairly. This includes business assets.

Equitable Distribution

Equitable division of assets under Pennsylvania § 3502 requires that assets be divided equitably , though not necessarily evenly (50/50). How are assets divided  “equitably”? The following factors are  some of those taken into account:

  • Length of marriage;
  • Disparity of incomes of the parties
  • Financial contributions made by each spouse to the marital estate;
  • Homemaking and or/child care contributions made by each spouse;
  • Financial earning ability of each spouse;
  • Age and health of each spouse;
  • Each parties ability to acquire additional assets

It should be noted that only marital property is subject  to division in divorce. Marital property is all property (and debt) acquired from the date of marriage to the date of separation. . Non-marital property is property owned by each spouse before the marriage began.; property received from a third party as a gift during the marriage; and/or property excluded from the marital estate by valid agreement.   When it comes to businesses, one of the spouses may have started the business before marriage, but the business grew substantially during the course of the marriage. In these cases, the increase in value of the business to the date of separation or the date of valuation, whichever is lower, will be used in valuing the business for equitable distribution purposes.

Asset Division Becomes More Complex For High Earning Marriages

The most fought-over aspect of divorce is division of marital assets, which makes sense considering that the top cause of divorce is money problems. According to Magnify Money, 21 percent of survey respondents cited money as the cause of their divorce. Money is an even higher source of conflict for higher earning marriages. Money is the primary cause of divorce for 33 percent of couples earning over $100,000, compared to just 18 percent of divorces for couples earning less than $50,000 per year. With more money, there are also generally more complications during divorce and asset division as well. Couples with small businesses and higher overall assets tend to have higher rates of high conflict divorces. For one thing, a small business may be worth a lot, but all of the assets are tied up into the business, and there are no liquid assets available to “buy out”  the other spouse who does not end up owning any of the business after divorce.

Call a Pittsburgh Business Asset Division Attorney Today

Solutions to equitable division of business assets in divorce include, though are not limited, to selling the business and dividing the profits; one spouse keeps the business while the other keeps the family house or other assets; the couple continue running the business together as co-owners after the divorce; one spouse keeps the business and pays a lump sum or a monthly buy out  to the other spouse for a predetermined amount of time; and more. An experienced Divorce attorney can either help you reach an agreement with your spouse through negotiation  and compromise, or through experienced, aggressive litigation if negotiation  fails. Call the Pittsburgh divorce attorneys at the office of Bunde & Roberts today at 412-391-4330 to schedule a consultation.


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