How Are LLCs treated in a divorce?

It’s no secret that divorces can be complicated, especially when an LLC may be involved. In a divorce, an LLC is typically considered a marital asset. This means that it will be subject to division between the spouses according to the applicable state laws.

The Rules For Division of an LLC

The rules for the division of an LLC in a divorce vary by state, as with any legal process. There are different legal theories that can be applied to determine how the LLC is to be divided. For example, some states apply ‘the equitable distribution principle,’ which requires the court to divide property fairly between each spouse based on individual factors such as the length of the marriage, the contributions of each spouse to the LLC, and the financial needs and resources of each spouse.

However, other states may follow ‘the community property principle,’ which considers an LLC to be jointly owned by both spouses, regardless of their individual contributions or involvement in the business. In cases like this, the LLC may be divided equally between both spouses.

Overall, the impact of the divorce on the LLC may depend on the operating agreement of the company. If the operating agreement specifies how the company will be divided in the event of a divorce, those terms can and will be followed, as long as they are consistent with state law.

Let Us Represent You

If you’re seeking representation in a divorce, partner with the team from the Law Offices of Audrey A. Jefferis, P.A. Our main office is located on Massachusetts Avenue in New Port Richey, FL, and is open from 8:30 a.m. until 5 p.m. Monday through Friday. Contact us today to arrange a consultation.