Every divorce has the potential for being amicable, but the more the situation is complicated by issues such as child custody or assets that need to be divided, the higher the risk of things getting nasty. When one or both spouses owns a business, the process can be complex and quite charged. Both partners want their fair share, and the business itself needs to be protected. In order to ensure that you are protecting your business in your divorce while still getting what you deserve, you need to work with an experienced divorce attorney. At Erik B. Jensen & Associates, we work with you to ensure that we understand your priorities and work towards all of your goals.
When a business interest is one of the assets that need to be accounted for in a divorce, the first question that needs to be answered is whether it is separate property or marital. If the interest was acquired during the marriage then it is clearly marital, and that means that its value needs to be divided equally. When a business was acquired prior to the marriage, it is considered separate, but the topic rarely ends there. If marital funds are used to add value to the business then that amount would be counted as marital, and so would a portion of any increase in revenue or value as a result of the investment. Where there is marital ownership, a valuation needs to be determined, and that is where the real difficulty can arise. It may be in one partner’s interest to assess the business’ value at a lower figure and the other to assess it as a higher number. It may be necessary to bring in experts to conduct the valuation, and this can become an extremely expensive proposition.
The best way to protect your business in a divorce is to think far ahead and set up your business the right way long before the marriage dissolves. This may involve establishing the business as a partnership with terms that protect the business interests in case of a divorce, paying yourself a salary that you can use to reinvest in the business rather than investing marital monies, and keeping your spouse out of the business operations during the marriage. If you did not take those actions, then you will likely need to find a way to compensate your spouse in order to maintain your ownership interest on your own. That usually means paying them with cash or other assets that have value to them – otherwise you risk having to sell the business in order to divide the sales price.
If you have invested emotionally, financially and physically in your business and do not want it to suffer as a result of your divorce, then you need legal guidance from experienced attorneys who can help you to protect it. The knowledgeable attorneys at Erik B. Jensen Attorneys at Law can provide you with all of your best options and help you achieve your goals.
