In every divorce, assets and liabilities must be divided – including business ownership or professional partnerships. Splitting up financial assets in a divorce can be fraught with difficulty, and business owners face a particular set of complications.
Asset negotiations during divorce are complex regardless of the size and scope of your business. Your small business, corporation, franchise, or partnership must be accurately valued and divided equitably. During a divorce, all assets and liabilities that your business has incurred during your marriage will be considered. With that being said, the true value of your business can be a significant point of contention. The best way to ensure that your business interests are protected during your divorce is to work with a skilled divorce attorney.
Document Ownership and Financial Assets
One way to help your legal team preserve your business interests in the event of a divorce is to establish yourself as the sole owner of your business and keep records of all of your business’s financial assets.
Establishing ownership can be achieved by ensuring that your firm’s organizing documents indicate that business ownership is tied solely to you and is non-transferable in the event of a divorce. Judges will determine equitable asset distribution based on thorough documentation of you and your spouse’s relationship to the business. The bigger the paper trail, the better off you will be.
Your interests in the divorce will also be strengthened if you document your business expenses. If you can demonstrate to the judge that business capital was acquired prior to marriage, for example, you will have a better shot at keeping that capital in your name post-divorce. As a business owner, you should also ensure that your personal and business expenses are kept separate so that the origins of your assets do not come under scrutiny.
Business Valuation in Divorce
If you have signed a prenuptial agreement, you may have stipulated that your business will be considered separate property in the event of divorce. In this event, business valuation and division may be unnecessary. If a prenup is not on record, it may be possible to sign a postnuptial agreement, and your lawyer can help you determine if this step applies to your divorce. If not, you must begin the complex process of business asset division.
Your legal team’s first step in this process is to assess the value of your business or partnership. Business valuations are often the trickiest aspect of asset distribution and can only be accurately achieved in close consultation with financial experts and your lawyer.
Protect Your Business with a Qualified Divorce Attorney
Having a skilled Michigan divorce lawyer on your side can help you protect your business interests and resolve your divorce successfully. For more information about how we can help with your divorce involving a business, contact us online today.