If you are going through a divorce, there are a lot of elements to figure out. One thing you need to work on is how you will divide certain assets in the divorce. For some, business assets will not come into play in a divorce. However, for others, business assets are a large piece of property, and need to be considered in a separation. If this is the case in your divorce, read on for more information.
Owning a Business
If you own your own business, there are two situations that could affect how this asset is split in divorce: if you own a business with your spouse, or if you own a business on your own. I will discuss both situations here.
First, consider what might happen if you and your spouse own a business together. If you own a business with your spouse, the court can easily split the business in divorce. The business is considered marital property and will be split as such.
Now, if one of the parties has a business partner, that can complicate things. This is because the court doesn’t have jurisdiction over the whole business. It only has jurisdiction over the individual’s shares in that business. So, you typically need to get the business valued and then you’d make a decision as to how to proceed.
If only one spouse owns the business, the business could have protection in the event of a divorce. A court could order that shares go to the business owner’s spouse, but the other partners in the business have a right to buy out that person. The other partners may do this because they don’t want to be in business with the disgruntled ex-spouse. So, the business can trigger those types of outcomes.
Oftentimes, a business contract will have provisions for what happens to shares in the business in the event that one partner gets divorced. When this is the case, the court can follow the contract when making decisions about splitting business assets.
What happens to business assets in divorce depends on the individual situation. Factors that could affect business assets in divorce include if one spouse or both spouses are partners in the business, and if the spouse wants to have a role in the business or if they just want their share in the value of the business.
If you need help splitting business assets in divorce, contact our office. We have seen these situations before and we can help you with yours.