New Rules for Dividing a Business in Your Florida Divorce
If you or your spouse owns a business, divorce just got a bit more structured in Florida. House Bill 521, signed by Governor DeSantis in June 2024, rewrote the rules for how courts handle closely held businesses, interim asset distributions, and interspousal property transfers during divorce proceedings.
These changes matter. Business interests are often the most valuable and most contested assets in a divorce, and the old framework left too many questions unanswered.
What HB 521 Changed
The new law amends Florida Statute § 61.075, the equitable distribution statute that governs how marital assets and liabilities get divided. Three areas stand out for business owners.
Business valuation standards are now codified. Courts must consider specific factors when determining the value of a closely held business interest, including the role of goodwill and the impact of restrictive covenants like non-compete agreements. Before HB 521, judges had broad discretion in how they approached valuation. Now there’s a statutory framework.
Interim partial distributions are easier to obtain. If your divorce drags on, you may need access to certain assets before everything is finalized. The new law revises the definition of “good cause” for granting interim distributions, requiring courts to weigh factors like preventing asset loss or covering necessary expenses during the proceedings.
Interspousal gifts of real property must be in writing. If one spouse transferred real property to the other during the marriage, HB 521 requires that transfer to comply with the same formalities as any other real property conveyance under Florida Statute § 689.01. Verbal or informal transfers won’t cut it.
Business Valuation: What Courts Consider
Valuing a closely held business has always been one of the harder problems in divorce. Unlike publicly traded stock with a clear market price, a family business or professional practice requires expert analysis.
Florida courts generally look at three approaches:
Income approach examines the business’s earning capacity. This method considers historical revenue, profit margins, projected growth, and the risk of future earnings. It’s common for professional practices and service businesses.
Market approach compares the business to similar companies that have sold recently. This works better when there are comparable transactions to reference, which isn’t always the case with smaller or niche businesses.
Asset approach adds up the fair market value of business assets minus liabilities. This method may undervalue businesses where the real worth lies in client relationships, brand reputation, or intellectual property.
HB 521’s emphasis on goodwill is significant. Personal goodwill (value tied to the owner’s individual reputation and relationships) is treated differently from enterprise goodwill (value tied to the business itself). This distinction affects what’s subject to division. A medical practice might have substantial personal goodwill that follows the doctor, while a retail business might have enterprise goodwill that exists independently of who runs it.
Protecting a Business You Built
If you own a business and are heading toward divorce, several steps can protect your interests.
Get a professional valuation early. Don’t wait for court proceedings to determine what your business is worth. Hire a forensic accountant or certified business appraiser who understands Florida’s equitable distribution framework. Having your own valuation gives you a foundation for settlement negotiations.
Separate personal and business finances. Commingling personal and business funds makes it harder to argue that certain business assets are non-marital. If you started the business before marriage, maintain clean financial boundaries.
Document your role. The distinction between personal and enterprise goodwill depends partly on how central you are to the business’s operation. Keep records showing whether the business could function without you or whether clients would leave if you stepped away.
Consider buyout structures. If you want to keep the business, you’ll likely need to compensate your spouse for their marital share. This can involve cash payments, offsetting other assets (like the marital home), or structured payments over time. Understanding your options before negotiations begin puts you in a stronger position.
When Your Spouse Owns the Business
If your spouse is the business owner, your concerns are different. Hidden income, undervalued assets, and creative accounting are real risks. You need your own forensic expert reviewing the business’s financial records, tax returns, and operating agreements.
Florida law requires full financial disclosure, but that doesn’t mean every spouse complies voluntarily. If discovery reveals inconsistencies between reported income and lifestyle, that raises questions worth pursuing.
The interim distribution provisions in HB 521 also matter here. If your spouse controls the family’s income through a business, you shouldn’t have to wait months or years for access to marital funds while the divorce is pending.
The Bottom Line
HB 521 brings more structure and predictability to business-related divorce issues in Florida. For business owners, that means more defined valuation standards and clearer rules around property transfers. For non-owner spouses, it means stronger tools for accessing marital assets during proceedings.
Either way, business valuation disputes require experienced legal counsel and qualified financial experts. The stakes are too high and the issues too technical to navigate without professional guidance.