Hire a Divorce Attorney in Waukesha WI to Prevent Double Dipping

Hire a Divorce Attorney in Waukesha WI to Prevent Double Dipping

Double dipping occurs when a divorcing spouse is paid twice for the same asset (such as if it’s counted during spousal support calculation and property division). Double dipping is regarded as unfair to the party paying the support, and is prohibited in some jurisdictions. It most commonly occurs with non-tangible assets such as retirement plans and business goodwill.

Goodwill as it Pertains to Divorce

“Goodwill” is the ability of a business to enjoy continued profitability; it’s an intangible asset used in property division and spousal support calculation. During a divorce, goodwill is handled differently than in a business setting, as it’s calculated based on earnings history rather than earnings potential.

Avoiding Double Dipping During the Divorce Process

There are multiple ways courts can avoid goodwill double dipping during a divorce:

*    Excluding business goodwill when dividing marital property, especially in cases where spousal support is awarded

*     Listing goodwill as part of the spousal support package

*     Dividing business assets evenly, treating the business as if it is dissolved

Amortization of goodwill

These solutions are common, but have certain disadvantages. For instance, if the goodwill is part of a spousal support package, the divorcing couple would have to draw up an agreement accordingly. Courts are often reluctant to include business goodwill in a spousal support agreement.

Factors to Consider when Calculating Goodwill

It can be difficult to calculate goodwill, even in cases where double dipping cannot occur. Courts analyze factors such as the length of the union, the date of the business’ creation, and each party’s contributions to the business. Spousal support, tax implications, and each spouse’s level of control over the business are also considered. Most courts take an individualized approach when calculating goodwill during a divorce, and rulings vary substantially.

Hiring an Attorney to Help with Business Goodwill and Double Dipping

Issues pertaining to business goodwill and the prevention of double dipping can be very complex, often requiring the help of an appraiser to arrive at a figure. A Divorce Attorney can help you determine how your state’s laws affect the division of assets and liabilities. To avoid a double dipping situation, hire a divorce attorney in Waukesha WI to help you throughout the process.

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