Owning a business is hard. Getting a divorce is hard. Combine the two and you have the potential for a nightmare scenario.
Luckily, the worst nightmares can be avoided with the proper legal assistance.
At Leap Frog Divorce, we understand what’s at risk. We’ve guided countless business owners through the divorce process with compassion, clarity, and strategy. Whether you’re a sole proprietor, part of a partnership, or own a limited liability company (LLC), we’re here to help you protect your future.
This article walks through the most important issues surrounding business ownership and divorce, from valuing a company to determining what’s considered marital property and how to navigate disputes when a spouse contributed to the business.
Is Your Business “Marital Property”?
One of the most common misconceptions business owners have is: “I started the business, I worked hard to build it, so it’s mine.” Unfortunately, Florida divorce law doesn’t see it that way.
Florida is not a community property state, where each spouse gets 50/50. Instead, we follow equitable distribution, which means marital property is divided fairly—but not always equally.
In Florida, all property that was acquired during the marriage is presumed to be marital property, regardless of whose name is on the title or who put in the most work. Yes, that includes ownership interests in a business.
Even if your spouse never worked in the business, they may still have a claim to part of its value. Florida courts recognize indirect contributions—for example, if your spouse managed the home or cared for children so you could focus on growing the business, that can be considered a marital contribution.
In these situations, the business becomes a mix of separate property and marital property. The part you brought into the marriage might remain yours alone, but any appreciation, income, or improvements made during the marriage may be divided between you and your spouse.
That’s why it’s so important to work with experienced family law attorneys who understand the nuances of business ownership in divorce cases.
If My Husband Owns a Business, Do I Own It Too?
This is one of the most common—and most emotionally charged—questions we hear:
“If my husband owns a business, do I own it too?”
Or vice versa: “My wife started the company, but I helped at every step. Am I entitled to anything?”
The short answer is: Maybe. It all comes down to timing, contribution, and value.
Here’s what courts typically look at:
- When the business was started: If it was started before the marriage, part of the business may be classified as separate property. But if it was launched during the marriage, it’s probably marital property—even if your name was never on any paperwork.
- How the business grew: If the non-owner spouse put in work to grow the business during the marriage—or contributed in any way—then that growth may be considered marital.
- Whether marital funds were used: If you used joint income, savings, or even a second mortgage on your family home to fund the business, that matters.
For example, say your husband started an LLC two years before the marriage. Once married, he brought you on as the bookkeeper while using marital income to lease office space. Even if you didn’t draw a paycheck, your contributions and the use of marital assets may make a portion of that business subject to division.
At Leap Frog Divorce, we help clients uncover exactly what they’re entitled to when business ownership is part of the equation. These cases are rarely straightforward—which is why having the right legal strategy makes all the difference.
How Is an LLC Treated In a Divorce?
Some business owners assume forming a Limited Liability Company (LLC) will protect them from property division during a divorce—but this is a common misconception.
Even if your spouse is the sole member of the LLC, that doesn’t mean you have no rights. Courts look beyond business structure to evaluate whether the business is a marital asset and how much of its value was acquired during the marriage.
What the Court Will Consider
Whether the LLC is subject to division depends on several factors, including:
- When the LLC was created
- Whether your spouse contributed time or labor
- Whether marital funds were used to support or grow the business
- Whether the business appreciated in value during the marriage
Even if you started your LLC before getting married and used no joint funds, your spouse might still have a claim if they helped run the business or provided administrative or strategic support—even informally. That contribution could make part of the business value marital property.
Should You Name the LLC in the Divorce?
If you want the assets of the LLC—such as real estate, equipment, or accounts—to be divided during your divorce, the business itself must be listed as a party to the case. This is an often-overlooked step in the divorce proceedings, but it can make a significant difference.
To include the LLC, you (or your attorney) must name it in the Petition for Dissolution of Marriage and have the LLC formally served with the pleadings. If you don’t name the LLC, your spouse may still include it in their counter-petition.
That said, naming an LLC in your divorce isn’t always the best move. Doing so may expose assets that could otherwise remain untouched—like a home owned by the LLC that you live in. In some cases, it’s better to keep the company out of the divorce, particularly if you want to avoid forced sales or asset disruption.
At Leap Frog Divorce, we help clients weigh these options carefully so that your rights and your livelihood are fully protected during the divorce process.
What About Operating Agreements?
If your LLC has an operating agreement in place, it may include provisions for what happens to a membership interest in the event of a divorce. While these agreements don’t override Florida law, they can help protect your business from unwanted ownership transfers or disputes with your former spouse.
At Leap Frog Divorce, we help clients navigate these choices with precision—balancing legal strategy with real-world business considerations.
How Is a Business Valued In a Divorce?
Before you or the court can determine how much of your business should be divided in a divorce, you have to know what it’s worth. That’s where business valuation comes in.
In divorce cases involving business ownership, valuation is one of the most critical—and most contested—issues. Whether your business is a sole proprietorship, a partnership, or a limited liability company (LLC), knowing the fair market value is essential for equitable distribution.
There are several methods used to determine the value of a business during the divorce process, each with its own strengths depending on the business type and available data:
- Income-Based Approach: This method looks at the company’s historical earnings and projected future income. It’s commonly used for established businesses with reliable revenue streams.
- Asset-Based Approach: This approach values the business based on its total assets (minus liabilities). It works well for companies with significant tangible assets, such as real estate or inventory.
- Market-Based Approach: This method compares your business to similar companies that have recently sold in the open market. It’s useful in industries with consistent sales data, though not all businesses have comparable sales.
The Role of Goodwill
Another concept to understand is goodwill—the intangible value tied to a business’s reputation, customer base, or the unique skills of the owner. If the success of your business depends heavily on your personal expertise or relationships, the court may determine that much of its value is not transferable and assign less or no monetary value to it.
For example, if you’re a solo medical practitioner or consultant and your clients work with you specifically, the court may decide that without you, the business has little to no value.
Business Valuation Experts
The method used—and the expert hired—can have a huge impact on the outcome of your divorce. In many divorce cases, each spouse hires their own business valuation expert, and the court must choose between the two valuations. Judges are not allowed to simply average the numbers—they have to select one expert’s opinion over the other.
That’s why having a qualified valuation expert who understands both dividing a business and family law can make or break your case. At Leap Frog Divorce, we work closely with experienced valuation professionals who know how to present compelling, credible analyses that stand up in court.
How Divorce Can Affect Your Business Operations
When your business is considered a marital asset, it will be treated like any other property during your divorce—it must be identified, valued, and equitably divided. But dividing a business isn’t as simple as splitting a bank account or selling a car. Your company may be your income source, your passion, and your long-term plan for financial security.
Who Gets to Keep the Business?
In most Florida divorce cases, the court won’t hand the business over to your spouse or force former spouses to work together after the marriage ends. Instead, the judge will usually award the business to one spouse—typically the one most involved in its operation—and compensate the other spouse for their share of the business’s value.
This is often referred to as a buyout. The spouse who keeps the business may need to:
- Pay the other spouse cash or other assets equal to their share;
- Refinance or restructure debt to provide a lump-sum payout;
- Transfer non-voting stock or ownership interests (which can create future complications if not handled properly).
What If You Can’t Afford to Buy Out Your Spouse?
If you don’t have enough liquidity to buy out your spouse’s interest, you may be forced to sell the business and split the proceeds. In that sense, you could “lose” your business in a divorce.
And if you issue stock to your spouse as part of a settlement, be cautious. If that stock comes with voting rights, you could find yourself running the business with your ex. Most judges try to avoid this situation, but it does happen when other options aren’t available.
Can I Sell My Business Before a Divorce?
Technically yes, but you need to be strategic.
Selling a business before the divorce is filed doesn’t automatically exclude it from division. If the business—or its increased value—was acquired during the marriage, the sale proceeds will likely be considered marital property and your spouse may still be entitled to half.
Also, courts will evaluate whether the sale was a legitimate business decision or an attempt to hide or diminish assets. As long as it’s not considered marital waste, you’re typically within your rights to proceed. But as always, talk to a divorce attorney before making any big financial moves.
How to Protect Your Business in the Event of a Divorce
If you’re a business owner facing a divorce—or even thinking about the possibility—it’s smart to be proactive. Your company may be your largest asset, and protecting it requires more than just good intentions. It takes planning, documentation, and legal strategy.
Here are several steps you can take to reduce the risk to your business in the event of a divorce:
1. Use a Prenuptial or Postnuptial Agreement
A well-drafted prenuptial agreement (or a postnup if you’re already married) can clearly define your business as separate property and outline exactly what happens to it in the event of a divorce.
While these agreements must meet certain legal standards to be enforceable, they are one of the most effective tools for protecting business ownership.
If your business predates your marriage—or you’re starting one soon—talk to a qualified divorce lawyer or family law attorney about including business-specific terms in your prenup or postnup.
2. Maintain Clear Boundaries Between Personal and Business Finances
Avoid treating your business like your personal piggy bank. Commingling personal and business funds is a common reason courts classify a company as marital property. To help keep your business interests distinct:
- Pay yourself a reasonable salary instead of covering personal expenses directly from the business.
- Keep separate bank accounts for personal and business funds.
- Document all capital contributions clearly.
3. Have a Strong Operating Agreement or Partnership Agreement
If you own a limited liability company (LLC) or are part of a partnership, your operating agreement or partnership agreement should include a clause that addresses what happens in a divorce. This can help prevent your spouse from gaining membership interest or voting power in the business.
These documents can also include buy-sell provisions or restrictions on transferring ownership to non-partners, which adds a layer of protection if a co-owner goes through a divorce.
4. Avoid Actions That Look Like You’re Trying to Devalue the Business
Some business owners, in an attempt to limit the amount their spouse might receive, try to reduce their business’s value before filing for divorce—by taking on debt, delaying income, or making large equipment purchases. While not always illegal, these moves could raise red flags if the court suspects you’re intentionally reducing the business’s value.
If you’re considering a big financial move, make sure there’s a valid business reason for it—and consult with a lawyer before you act.
5. Work With a Divorce Attorney Who Understands Business Assets
Protecting your business in a divorce requires legal strategy, financial analysis, and a clear understanding of how Florida courts treat business assets. At Leap Frog Divorce, we leave no stone unturned when it comes to safeguarding what you’ve built—so you can focus on your future, not just your fight.
What If My Business Partner Is Getting Divorced?
You might be feeling secure in your own marriage, but what if your business partner is the one facing a divorce? Could their personal situation impact your stake in the company?
Unfortunately, the answer is: yes, it might.
When a partner goes through the divorce process, their ownership interest in the business may be considered marital property—just like yours would be in your own divorce. And if their spouse contributed to the business or if the business increased in value during the marriage, that spouse may be entitled to a portion of your partner’s share.
For example, if your partner owns one-third of the business and their spouse is awarded half of that share, their ex could now hold approximately 16% ownership interest in the company.
What Happens If Their Ex Gets Involved?
The biggest concern is whether the spouse ends up with actual membership interest or voting rights in your company. If they do, you could find yourself suddenly running the business with someone who doesn’t understand the company or have your business’s best interests at heart.
This can create serious friction—and potentially put the business’s future at risk.
How to Minimize This Risk
The best way to protect yourself and the business is through strong internal agreements. Your operating agreement or partnership agreement should include provisions that:
- Restrict the transfer of ownership to non-partners
- Require approval before any ownership interest is sold or assigned
- Include buy-sell provisions in the event of a divorce
These clauses can help ensure that a divorcing partner can’t hand over part of the business to their spouse without giving other partners the opportunity to buy that share first.
At Leap Frog Divorce, we don’t just think about your personal divorce—we think about how your spouse’s or partner’s divorce could affect your entire business ecosystem. It’s all part of the comprehensive, strategic approach we take to protecting what you’ve worked so hard to build.
You Built It—Let’s Help You Protect It
As a business owner, you’ve poured time, energy, and sacrifice into building something that supports you, your family, and your future. Facing a divorce can feel like all of that is at risk—but it doesn’t have to be.
At Leap Frog Divorce, we understand that every divorce is personal—and when a business is involved, the stakes are even higher. You don’t need a “bulldog” attorney who escalates conflict. You need a guide who will protect your interests with strategy, skill, and compassion—someone who sees the full picture, from financial concerns to family dynamics.
Whether you’re wondering how an LLC is treated in a divorce, if your spouse has a right to your business, or how to safeguard what you’ve built, we’re here to walk you through it.
Our methodical approach leaves no stone unturned—from parenting plans to business ownership, operating agreements, and beyond. We’ll help you avoid costly mistakes and unnecessary stress, so you can move forward with clarity and confidence.
Ready to protect your business and your peace of mind? Call us today at 407-559-6900 or send us a message. We’ll contact you quickly, listen carefully, and help you take the next right step.
