- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Protecting a business from divorce
Posted on 12/10/19 at 12:31 am
Posted on 12/10/19 at 12:31 am
My friend just finalized a divorce that really kicked him in the nuts. He had about 900k in the bank, and a business that brought in about 400k last year and 300k this year. Somehow his business was valued at $1 million, and his payout was calculated off that. Problem is, there is no way he could sell it for anywhere near that. It could sell for maybe $100k. The divorce will likely force him to sell his house and business to pay because of the bullshite valuation(no long term contracts, only relationships).
It got me thinking. If a married man starts or acquires a business(with very little to no purchase cost), how can he structure it to protect himself and retain ownership if his wife goes nuts and decides to bail? Is it possible to retain all ownership if set up properly, or are guys pretty much fricked no matter what?
ETA: I know it's too late for my friend. I am wondering about how a currently married guy can start/set up a business that is insulated...if that's even possible
It got me thinking. If a married man starts or acquires a business(with very little to no purchase cost), how can he structure it to protect himself and retain ownership if his wife goes nuts and decides to bail? Is it possible to retain all ownership if set up properly, or are guys pretty much fricked no matter what?
ETA: I know it's too late for my friend. I am wondering about how a currently married guy can start/set up a business that is insulated...if that's even possible
This post was edited on 12/10/19 at 12:52 am
46
Posted on 12/10/19 at 12:33 am to SoulGlo
1.Don’t marry
2. ??????
3. Profit
2. ??????
3. Profit
Posted on 12/10/19 at 12:33 am to SoulGlo
Are we talking about MIKEDATIGER?
Posted on 12/10/19 at 12:34 am to SoulGlo
sell out to his business partner for pennies on the dollar before the divorce process starts? if he's gonna get fricked anyway might as well.
Posted on 12/10/19 at 12:38 am to oVo
quote:
1.Don’t marry
2. ??????
3. Profit
Already married when business is acquired.
I actually thought of buying his business from him for a stupid low amount, then keeping his clients.
Business was already valued high when I found out about the divorce tho. Baw should planned ahead and sold it to me before he filed
Posted on 12/10/19 at 12:40 am to SoulGlo
quote:
Baw should planned ahead and sold it to me before he filed
Wait... he filed and did nothing to protect himself? Best way to protect yourself, not hiring any of this guy's attorneys.
Posted on 12/10/19 at 12:48 am to MoarKilometers
I'm not sure if it was him or the crazy bitch, but yeah.
I would have certainly done it differently... including purchasing BTC and then Monero. Bye bye bank account.
My question is for a married guy buying/starting a business though. How to set up the business so it is insulated from the whims of a wife? It's way too late for my friend.
I would have certainly done it differently... including purchasing BTC and then Monero. Bye bye bank account.
My question is for a married guy buying/starting a business though. How to set up the business so it is insulated from the whims of a wife? It's way too late for my friend.
This post was edited on 12/10/19 at 12:50 am
Posted on 12/10/19 at 12:49 am to SoulGlo
Your friend is fricked. Don't get married
Posted on 12/10/19 at 1:40 am to SoulGlo
You’d have to set it up in your name only, keep all expenses and profits documented, then keep all the business transactions in a different bank from your community money....
and thennnn maybeee you could show it was all yours.
But honestly, it would be community property bc you had to start it with money that was first, community money.
But, now, if you could prove it was started with money you already had before you got married and it was and has continued to be separate? Then maybe.
and thennnn maybeee you could show it was all yours.
But honestly, it would be community property bc you had to start it with money that was first, community money.
But, now, if you could prove it was started with money you already had before you got married and it was and has continued to be separate? Then maybe.
Posted on 12/10/19 at 2:08 am to SoulGlo
Even a prenup probably would not be enough to protect it these days.
Posted on 12/10/19 at 2:43 am to SoulGlo
quote:
Somehow his business was valued at $1 million, and his payout was calculated off that. Problem is, there is no way he could sell it for anywhere near that. It could sell for maybe $100k.
This makes absolutely no sense at all.
Posted on 12/10/19 at 2:43 am to sgallo3
quote:
sell out to his business partner for pennies on the dollar before the divorce process starts? if he's gonna get fricked anyway might as well.
This and some of the other things being discussed are a fraudulent conveyance that has ramifications.
Protecting a pre or post marriage business can be complex and depends a lot on the state you are in. Anyone starting a business post-marriage needs to consult a competent attorney if they are to have any chance of insulating those assets. It isn't actually very easy to do.
Posted on 12/10/19 at 3:43 am to FightnBobLafollette
quote:sometimes it does. I had a friend that this exact thing happened to. He owned a small business that sold industrial lighting. He made a good income from it but it was only because of his sales skill and him putting in the work. He didn’t have any assets in the business or inventory it was just him buying and selling, really nothing to sell just him busting his arse.
This makes absolutely no sense at all.
Posted on 12/10/19 at 6:15 am to SoulGlo
May want to post this on the Money Board.
Posted on 12/10/19 at 6:19 am to SoulGlo
$700k over 2 years in revenue, or profit?
If revenue, valuation seems realistic but possibly high. If profit, valuation extremely low. I’d be interested to hear what kind of business it is.
If revenue, valuation seems realistic but possibly high. If profit, valuation extremely low. I’d be interested to hear what kind of business it is.
Posted on 12/10/19 at 6:22 am to SoulGlo
quote:
Somehow his business was valued at $1 million, and his payout was calculated off that.
Not enough information to provide appropriate response. Please rephrase with exactly what happened.
Generally, he should have a competent attorney who would hire a competent business valuator as an expert witness and who could refute the methodology and results of his wife’s expert witness.
If it’s really only worth $100K then there’s no way if this was competently managed that there’s that big of a gap.
Also, I’m sure you’re not privy to all the facts and circumstances becaus he hadn’t told you.
Posted on 12/10/19 at 6:27 am to SoulGlo
A very basic rule of thumb is a business is worth 3-4 times its net profit after the cost of paying the CEO/ GM. So if the owner is also a GM you have to subtract their income.
Most small businesses are not worth as much as people think because the owner busts their arse as the GM/ CEO.
Given that, it’s very simple OP. You structure your company so that you as the owner only actually own a small portion of the company and someone else or another entity own a majority. It’s not like there’s not risk in that either.
Most small businesses are not worth as much as people think because the owner busts their arse as the GM/ CEO.
Given that, it’s very simple OP. You structure your company so that you as the owner only actually own a small portion of the company and someone else or another entity own a majority. It’s not like there’s not risk in that either.
This post was edited on 12/10/19 at 6:30 am
Posted on 12/10/19 at 6:41 am to SoulGlo
quote:
I know it's too late for my friend. I am wondering about how a currently married guy can start/set up a business that is insulated...if that's even possible
after you're married, any property obtained is presumed to be community, but the presumption can be rebutted by showing it was a gift just for that spouse. I've always wondered how a judge would view a person's parents setting up an LLC and donating it to their son to run his business in.
Posted on 12/10/19 at 6:47 am to SoulGlo
If his profit is 3-400k a year his business would sell for more than 100k if the sale includes current clients and such.
Can he not structure payments to her to mitigate the sting? If not he hired a shitty attorney
Can he not structure payments to her to mitigate the sting? If not he hired a shitty attorney
Posted on 12/10/19 at 6:47 am to SoulGlo
I hope his attorney recommended hiring another valuation expert to review and counter the million dollar valuation on his business. There are likely some discounts that can be taken to lower the value for community property purposes and will save him significant dough.
Curious the type of business and if the money he is bringing in is sales, net income, EBITDA, or sellers discretionary earnings.
Curious the type of business and if the money he is bringing in is sales, net income, EBITDA, or sellers discretionary earnings.
This post was edited on 12/10/19 at 6:50 am
Page 1 of 5
Popular
Back to top
Follow TigerDroppings for LSU Football News