Published on December 25th, 2018 | by Sunit Nandi0
How Will Divorce Affect Your Business?
If you are a business owner and there is the possibility of divorce right around the corner, it is normal to be worried. There is much time that is spent building any business so you do not want to end up having your ex as a business partner because of a divorce. Not much is understood about how divorce affects business ownership but the important thing to remember is that you always need help from a divorce lawyer Jonesboro specialist. Discuss your particular situation with the lawyer so you understand exactly what will happen in your case. Besides this, you should know the following.
How A Divorce Can Affect The Business
If you are a business owner and you get a divorce, there is the possibility you end up in a less-than-desirable situation. It is possible that you end up in a partnership with the ex-spouse or that half of the company is handed over as community property.
It is also possible that the business is going to be liquidated with you and the ex having to split proceeds. However, this is a rare situation, especially in the even that businesses pay family bills. This option is only considered in the event that there is nothing else that is agreed in relation to the business.
Divorce Cost On The Business Owner
The spouse can always hire an experienced forensic accountant in order to figure out exactly how much a business is worth. When the business opened its doors before marriage started, divorce will not affect anything. It is considered to be separate spouse property. Unfortunately, there are many businesses that end up losing such a status when the marriage happens.
If the business is now more valuable, with value growing during marriage, the value increase can be seen as marital property. When there is something labeled as being marital property, it is going to be divided during divorce. Value increase can be calculated and be put into equitable or equal distribution.
When the other spouse contributed to the business, it is a certainty that the company is seen as being marital property. The same goes when a business formed during a marriage. Courts will not always have business money forced towards ex payment, but it is a possibility.
No matter the case, it is important to realize the fact that divorce and business will not mix well. Taking steps in advance is always the best possible solution.
Protecting The Business
There are different things that you can do to protect your business and your finances in the event that a divorce happens. This includes:
- Prenuptial agreements
- Postnuptial agreements
- Buy-Sell arrangements
- Working alone as opposed to with the spouse
- Pay a salary to yourself
- Always keep business and personal expenses separate
- Have the business put in a trust so it is not a marital asset
As already mentioned, do be sure that you talk with a lawyer that has experience in family law. It is always better to be protected, no matter what you might think right now.