If you own a business and your marriage is headed toward dissolution, then you’re probably worried about how your divorce is going to affect your financial stability and your business operations. This is understandable. After all, unless you have a prenuptial agreement in place, your business will be subjected to the property division process.
Important considerations when dealing with a business
As you navigate your divorce, you’ll need to assess some key components of your business. Let’s look at some of them here:
- What do you want for the business moving forward? This is probably the first question that you need to answer. If you want the business to continue and remain a part of it, then you’ll have to think about if there’s a way for you and your spouse to still be involved with the business. If you and your spouse both want out of the business, then the best option may be to just sell it and split the assets. You have several options here, so carefully consider them and their ramifications before you move forward.
- What is your spouse entitled to? Your business may be treated differently if it was created prior to your marriage than if it was created during your marriage. Also, your spouse’s contributions to the business can affect his or her access to business assets. So, think through to what your spouse may be entitled and the arguments that he or she is going to try to make to justify a request for a bigger piece of the business.
- What valuation methodology is right for you? Before the business can be properly addressed, you and your spouse have to know its value. There are many ways to valuate a business, so make sure you understand the options and advocate for the one that makes the most sense for your circumstances.
- What are the current assets and liabilities? You’ll want to be thorough and clear here, as this accounting is going to set the stage for what can and will be divided, including outstanding debts. Make sure that your spouse isn’t inflating debts or minimizing the value of assets. Also, be cognizant of hidden assets.
- Understand how wages may come into play. When looking at how much you’re paying yourself, you should understand that your spouse may consider your income to be consistent with that typically paid for your position in the market. This is an important consideration so that you have an accurate picture of what’s at stake when it comes to property division and spousal support determinations.
- How will your other marital assets come into play? There are going to be certain things that you need and want out of your divorce. You may be able to use business assets as a way to get the resolution that you desire. You’ll want to be careful here, though, because you want to make sure that you’re protecting your short-term and long-term interests.
Minimizing the impact to your business
Remember that these are just some broad issues that you’re going to have to address in your case. On top of those, you’re also going to have to face the nuanced struggles of keeping your business operations flowing while dealing with the realities of your divorce.
It can be a trying time, for sure, but it’s not one that you have to face alone. Instead, you can work closely with a law firm that is adept at handling these matters, which may give you the representation and the peace of mind that you need to successfully move past this chapter of your life and secure a fresh start.