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Hi, everyone. I’m Dr. Michael Mantell with another edition of Family Law Matters with Bonnie Rabinovitch-Mantel, the owner and managing partner of the Primus Family Law Group, where experience meets results. Hi, Bonnie.

Hi, Michael. How are you doing today? Doing great. How are you? How’s everything going with you? Busy as always.

Well, that’s good. Bonnie, you have a unique depth of resources and experience, and I want to draw on that today to talk about a specific area that pops up in discussions about marital separation, divorce, and that is what happens when in the marriage, one partner starts the business, starts a business, and now they’re divorcing, separating. What happens to the management of that business, the running of that business, the finances of that business? Well, the business still exists, so it continues to be run and managed by the person who’s always been running and managing it.

The issue then becomes, at least in my experience, is you have a lot of spouses who don’t understand why they actually have to buy their spouse out of that business, assuming it’s a profitable business, assuming the business is not the sole support of the family. Both people are working and one partner has a business. It’s hard for parties to understand that they’re going to have to share the value of what’s been built over the course of the marriage with the other partner, because maybe the other partner can’t run the business, is not equipped, either legally or they’re not in that field, and so why would I have to buy somebody out of a business they couldn’t even run anyway? And then you have a lot of spouses who say, fine, give them the business.

They know they can’t run it. That’s still not how that works. But what about the sense of, I don’t want to have to prove to you that I can’t run this business.

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I’ve been part of this business for the last eight years with you, and now you’re saying, I can’t run this business? Well, it depends on the type of business, Michael. I mean, if you’ve got a retail store and you’re both working in it, that’s one thing. You both run the business.

You both have equal management and control, but when it’s one person, for example, a dental office, one person is a licensed dentist. The other one is working somewhere else, maybe doing something else. They are not qualified to take over that business.

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So the dentist keeps that business, but for the ability to keep that business, they have to buy out the other partner, just like you buy them out of a retirement or transfer half value, just like you may have to buy them out of a home. It’s the same thing. It’s an asset that you’ve developed during the marriage.

It needs to be evaluated. There are several methods on how to evaluate a business, which is too complex for today. You know how to get them done.

And then it’s part of the discussion. When does this become a particularly hot issue? Where does the flame come in this type of a conflict? It comes from a couple of issues. One, if the person who’s working the business all of a sudden starts doing poorly.

If they’ve been doing really well during the marriage and all of a sudden you’re getting divorced and business is not booming, they want to try to minimize how much they may have to pay out. That can cause an issue. The other issue is let’s say if both spouses were working in the business, one spouse is the owner and so they fire the other spouse upon force.

That can cause a lot of those flames. And a third thing is spouses need to understand that because they’re married by law, they are business partners, which means their spouse has equal right to see a record in that business. And that causes a lot of problems.

I have a client and they’re both professionals in their particular practice without getting into any specifics. And they’re getting divorced. One person says, I’m going to really show the other.

And this person slows down income production, really all the way down to almost zero. What happens then as they have to dissolve this business? It’s marriage and the business. Well, doing it on purpose and the other spouse thinks that’s on purpose.

There are efforts that go in forensic accountants that we retain and that are you go in and say, well, here’s the Oracle. Here’s what’s going on in the market here. This doesn’t jump.

And that can be used in court to compute, to again, make this person have that income as if they have that income, even if all of a sudden they don’t because they’ve done something. It’s a lot different. I mean, it’s harder to prove with the panic because voluntary intentional or is it situational? So it’s, it can be difficult, but we have ways and there are experts that know what’s going on and take that into consideration.

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So I guess the point you’re making very well is if you think you’re going to hurt the other person by dialing down your productivity, it’s not going to happen. The court’s there to protect all parties. Yes.

And your attorney is there to get the evidence that is necessary because again, with equal management and equal control as business partners, we’re entitled to do discovery and to get all that documentation. So it gets found out. It’s just how expensive you want to process.

Great. And if people have questions about this and they want to speak with you and they think, well, maybe, you know, this, this business dissolution or this marriage dissolution really needs the expertise that Bonnie Rabinovitch-Mantel can provide. How do they get in touch with you? Well, remember, Michael, it’s not just me.

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It’s all team Primus. We’re all experts in getting people to get through this daunting thing we call family law. And you can reach us at 619.574.8000.

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We do offer a 30 minute phone consultation, or you can reach out to us at www.primefamilylaw.com a form you can fill out and reach us that way. And you’re so right. Last week, we had the honor of having Kimberly with us from Primus Family Law.

In the coming weeks, we’re going to have other attorneys that are part of the Primus Family Law team. So thanks very much, Bonnie. We’ll see you next time.

Have a great one.