A divorce is a challenging experience under any circumstances, but certain assets and situations can make divorce much more complicated. For example, owning a business might very well make a divorce far more of a challenge. Those preparing for the end of their marriage who own a business will typically want to retain a lawyer who is familiar with the unique challenges of business owners during a divorce.
What issues do business owners typically need to address with an attorney during divorce?
Employment and management concerns
It is common practice for people to hire their spouses and other close family members at their businesses as they begin growing. Thriving small businesses may require part-time help, which may be easier to get from family members than from strangers. Having both people employed at the family business may mean that they will have to address whether or not they can both continue working at the company afterward. If they arrange for both spouses to stay at the business, they will generally need to be very careful agreements in place regarding management practices to prevent interpersonal conflict from affecting the business itself.
The value and ownership of the business
After addressing concerns about the operations of the company and the employment of the spouses, it is often necessary to address the value of the business and its ownership. The company is likely at least partially marital property, as people tend to invest marital income in the business even if they owned it prior to marriage. Establishing how much of the business is marital property will be an important step. People will also need to perform a valuation. Figuring out how much the company is worth will be very important for property division negotiations. It is often possible to arrange for one spouse to keep the business, but they may need to make concessions and other areas of the property division process.
Those who don’t understand the nuance of divorcing with a business might put themselves at a disadvantage, such as allowing their spouse to claim future income from the business twice both during the business valuation process for property division purposes and then also during any spousal support or alimony negotiations. Having knowledgeable legal assistance will help a business owner identify and address the important matters regarding their business that can help to set them up for the best life after their divorce.