Separating assets in a divorce can be a challenge, especially if you are an entrepreneur.
Depending on your circumstances, your business could be a marital asset. You should review your options to protect your business and seek a fair outcome to your divorce.
Business ownership
Your business might be a separate asset if you started your company before you married and your spouse had no involvement with the business. Furthermore, you can strengthen the protection of your business as an asset by using a prenuptial agreement before marriage.
On the other hand, if you and your spouse started a business as partners after your marriage, the company is a shared asset that you must separate equitably in the divorce. In some cases, ownership can be complex. For example, if you owned a business for many years and hired your spouse as an employee, the outcome can vary depending on the nature and duration of each party’s involvement in the company.
Separation of property
It is important to determine the value of your business accurately. Your business’s valuation accounts for assets, market value and income. After you agree upon a valuation, you can decide how to separate your assets. For example, you can pay your spouse for their share of the business as a lump sum or over time. You can also allow your former spouse to own shares in the corporation, although this can be difficult for many divorced entrepreneurs to navigate.
If you are a business owner, educating yourself about the various ways to separate business assets can help you protect your interests throughout your divorce.
