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3 important considerations for divorcing business owners

On Behalf of | Oct 29, 2021 | Asset Division, Divorce

You have to juggle a million different details mentally when facing a divorce. The more complicating factors you have for your divorce, the harder it may be for you to separate your life from your spouse’s. If you own a business, then there is a lot at risk when you end your marriage.

Business owners may need to think very carefully about how to protect themselves and their company as they draw closer to divorce proceedings in Virginia. What are some of the most important considerations for divorcing business owners?

Is your business vulnerable in the divorce?

You already had the business when you got married or you inherited it, you may have taken certain steps to protect it, like executing a prenuptial or postnuptial agreement with your spouse. If not, you have to look and when you purchased the company or started it to determine if it is at risk in property division proceedings.

Determining whether the courts will look at your business as your separate property that doesn’t get split up or marital property that they have the authority to divide will play a major role in how you move forward with the divorce.

What is your business actually worth?

Someone who doesn’t understand the expenses and liabilities involved in running a business might think that a company is nothing but assets and income. However, businesses also come with a lot of liability and debts.

If your business is at least partially marital property, then it becomes very important for you to put a realistic value on the business. Factoring in debts, obligations and even the depreciation of business assets can help you minimize how much value from the company your ex can claim in the divorce.

What is it that your ex wants?

In addition to thinking about your legal obligations and financial circumstances, understanding your spouse’s motivation can be very helpful.

Perhaps they want to share long-term ownership of the company with you because they view it as a source of income. Maybe they just worry that they won’t get their fair share of marital assets if they don’t make a claim against the business.

Communicating with your spouse about their desires regarding property division could pave the way for a mutually beneficial settlement that does not impact your company at all.

Thinking about your unique needs as a business owner can help you prepare for the complex property division that often comes with business ownership in a divorce.