No two divorces are exactly alike, and each spouse faces unique challenges in order to reach a fair divorce settlement. For some couples with complex assets, divorce may affect many more people than themselves or their children, especially if one spouse is a business owner.
Despite the complex nature of a businesses, the law still considers them property that spouses may negotiate over, just like retirement accounts, real estate or vehicles. Many business-owning spouses worry that they simply cannot afford to divorce their spouse because the end of the marriage may also mean the end of the business.
If you own a business and have concerns about keeping the business in one piece as you dissolve your marriage, you must identify your priorities and build a legal strategy that supports them. Very few divorces finalize with both spouses getting everything they wanted, so it is wise to understand what you are and are not willing to sacrifice to achieve your goals.
Is your business in jeopardy?
Not all businesses go on the chopping block when an owner heads toward divorce. If you took the opportunity to protect your business before you got married with a prenuptial agreement, then you may have all the separation protection you need already in place. However, it is important to remember that prenuptial agreements are vulnerable to challenges if they are not properly written, so carefully review your prenuptial agreement if you have one.
Does your spouse have a valid claim?
In some instances, a business may not count as marital property if a business owner can prove that their spouse had little or no input on the operation and success of the business. Depending on the specifics of your circumstances, this may or may not apply, so you must examine your options carefully.
If your spouse does have a legitimate claim to some portion of the business’s value, then you need to know exactly what the business is worth. Unlike other assets, businesses have complex value, especially if they are large enough to have multiple employees and ongoing contacts with other parties.
To clearly understand your business’s worth, it is wise to have it undergo a professional valuation. Once you understand exactly what your business is worth, then you can negotiate a fair settlement more confidently, with fewer concerns that your spouse may inflate the business’s value.
Build your strategy now
The sooner you understand the risks that divorce poses to your business, the sooner you can begin building strong protections to keep it safe. In order to keep it intact through the property division process, you may need to offer your spouse additional assets or create a payment arrangement to compensate them fairly.
With careful planning and full use of all the legal tools you have available, your business just may outlive your marriage and provide a strong place to land on the other side. You will have the tools and resources you need to rebuild once your divorce is final.