Any divorce can be stressful, but as a business owner, your number one priority may be protecting your business. With your property divided equally during divorce, you may worry about who walks away with ownership of the business. If your spouse had no hand in running the business or day-to-day operations, it doesn’t make sense if they would leave your marriage with partial ownership of your pride and joy.
As your assets are divided, some of your higher value assets, such as your business, family home, or any other “big money” items may be evaluated to determine their worth in terms of your divorce. Since all property acquired during your marriage will be equally distributed between you and your spouse, the property must be accurately valued so the division of your property is financially accurate.
Who Owns It?
When considering a business evaluation, you also may want to consider the ownership of the property: is it separate or communal property? You’ll need to go back to when you began your business and note the date and funds with which you purchased or started your business. If you started your business prior to your marriage, then it may be considered separate property for the value in which you input prior to your marriage while the rest of the value would be regarded as community property. If your business began during your marriage or with your joint funds with your spouse then it would be considered entirely community property, even if your spouse had very little involvement at all.
Once the courts determine who exactly owns the business (if it is eligible for distribution) and the value of the business, then the courts will divide all property in a 50/50 split. This may mean that both spouses walk away with an equal cut of business ownership or one spouse may walk away with sole ownership if the other spouse is granted items of equal value, such as the family home, vacation home, or specific financial accounts.
How Do I Walk Away With Sole Ownership?
If you share ownership with your spouse but they are not involved in your business, then you may want to retain full ownership of your business. There are a few ways you can do this with the help of your high asset divorce attorney.
Offer to Take On More Debt or Give Up Something Valuable
During division negotiations, you may be able to retain sole ownership if you agree to take on more debt in exchange for full ownership of your business. You may also be able to retain sole ownership by giving up more valuable assets, such as the family home or other “big money” assets. Since negotiations focus on what you and your spouse want to walk away with, you should emphasize your desire for full ownership of your business.
Buy Your Spouse Out
If negotiating doesn’t work, then you may simply have to buy out your spouse’s shares of your business for sole ownership. While this isn’t an equal resolution, if your spouse refuses to negotiate about the business, then you may need to approach them about purchasing their shares following the end of property negotiations in your divorce. This may allow you to retain full ownership of your business: for a price.
Orange County High Asset Divorce Attorney
Undergoing a divorce with a high-valued asset, such as a business, can be stressful. With the help of our high asset divorce lawyer at Gill Law Group, PC, you can rest assured that our team is advocating for your best interests and seeking to reach your goals in your high asset divorce.
Are you a business owner seeking a divorce? Our Orange County high asset divorce attorney can guide you through business evaluation and advocate for your best interests. To learn more, schedule your initial consultation today by calling (949) 681-9952 or contacting us online.