Today more than ever, it is likely to have more than a husband and a wife as parties in a divorce case. Many times, one spouse may own a business or the parties may jointly own a business. In these cases of family owned businesses or where one spouse owns a business, it is important to add the business as a party defendant in the divorce case. It may be the only way for one spouse to truly receive a fair value of marital assets.
In the case of Vice v. Vice which originated from Jefferson County, Alabama, the husband filed a motion to join other parties to the divorce case. The parties had been married for 18 years at the time of the divorce. The husband’s position was that the wife had made substantial money transfers during the marriage and after the divorce action had been filed to various family members.
The husband believed that unless the additional parties were joined as parties to the divorce action, he would have no adequate remedy to recover the allegedly dissipated funds. In this particular case, the additional defendant happened to be family members. However, this is only one scenario. For example, let’s say that a father-in-law and the husband jointly own a business. The husband may claim that he is an employee and does not have any assets. The husband may own 50% of the business. The only way for the wife to receive a fair value of the marital assets is to add the business as a party to the divorce action.
The trial court in this case denied the motion to join additional parties, holding that it was “improper” to add those parties to the divorce proceedings. The husband filed a petition for writ of mandamus with the Court of Civil Appeals. The Court of Civil Appeals issued the writ of mandamus in favor of the husband.
In the present case, the wife did not dispute that she transferred substantial assets to various parties. The wife maintained that the total amount in question was $393,536.10. Her remaining assets exceed $1.3 million. She maintained that the adding of her family members to the divorce was not necessary because an equitable distribution can be made from her remaining assets. There is an exception that exists if the third party appears in the divorce hearing and is given an opportunity to be heard. The appellate court held, “Despite the wife’s arguments, this matter has not been tried, and there is no determination of what assets might be properly considered marital assets or how those assets might be divided.”
I can say from personal experience that I completely agree with this ruling. I have had several divorce cases in which I have added a business entity in order for my client to receive a fair and equitable value of the marital assets. These cases often require an expert witness to either evaluate the value of the business or determine the fair market value.
It is important to consider the long term effects of divorce. If you are seeking a divorce and have questions as to the value of the marital estate, please contact my office before you reach a settlement. I can help you get the relief you are entitled to. Call Joseph Ingram with INGRAM LAW LLC at (205) 656-0044.. Get Relief – Get Results.