If you own your own business and plan to divorce your spouse, there are a few things that you should first consider. Divorce can be complicated for business owners because it puts their company in a compromising position. From losing your business to being ordered by the court to form a partnership with your ex-spouse, there are number of negative consequences that can arise if you are not prepared for your divorce proceedings. This is why it is crucial to make sure that your business interests are fully protected before you file your divorce papers. In this blog, we explain how your divorce can impact your business and what you need to do to protect it.
Depending on your situation, your spouse might be legally entitled to half of your business and assets. When your finances are analyzed as part of the divorce, it might be deemed that your business falls into the category of marital assets. Savings, real estate, debts, and certain business ventures can all be considered marital assets.
However, there are exceptions to this, which includes:
- Assets acquired prior to the start of the marriage
- Assets acquired after the marriage ends
- Assets protected by a prenuptial or postnuptial agreement
- Gifts and inheritances
If you first started your company after you were married, it is generally counted as a marital asset. If you started your company before you got married, it should be disqualified from the marital assets. If your business was successful during your marriage and saw solid growth, its marital value will increase. If you have put money from your business into a joint-savings account, it will also be considered part of the marital property. Investments and retirement accounts that you have contributed to during the course of your marriage can also be divided during the divorce proceedings.
The following are two strategies you can use to protect your business interests:
- LLC’s & Corporations: Making your business into a limited liability company can be one way to keep your assets from being labeled as marital property. You can also form a c-corporation or an s-corporation to hold your business assets.
- Trusts: A trust is a separate legal entity that can be used to hold your business assets. Talk to an experienced attorney about which type of trust will work for your particular situation.
Consult With a Business Divorce Lawyer Today
At Hanson, Gorian, Bradford & Hanich, we know that divorce is stressful enough, and the last thing you want to worry about is losing the business that you have worked so hard to establish. That is why our legal team is committed to protecting the rights of our clients and helping them resolve their divorce disputes. If you are a business owner who is thinking of getting a divorce, you should consult with our Murrieta divorce lawyers. We have the skills and resources that you need to secure a positive outcome. Let us get to work for you today.
Contact us to schedule a free consultation with our legal professionals in Murrieta.