Business owners often wonder how they may avoid losing half their business in a pending divorce. The answer to this question is always prefaced with a series of questions to the business owner. However, in the end, most business owners walk away with a better idea of what they are facing, and this knowledge creates peace of mind.
Parties must consider these 4 issues when evaluating their business’ exposure in the pending case:
- Can your spouse actually own any of the business?
Some businesses create unique ownership issues for divorced couples. For example, a non-lawyer can’t own a law practice, therefore, maintaining ownership of the practice by a divorced non-lawyer spouse isn’t an option. If your business prohibits non-licensed parties from owning an interest in the practice or business, then cash value is the only thing of worth in your divorce.
- Were you married when you started the business?
If your business started prior to your marriage, the value of the business prior to marriage is your separate property. If you started the business while married, then this issue is irrelevant because the business is a marital asset. If any of your business can be considered separate property from before the marriage, you will want to ensure the value of the premarital business is accurately appraised and you’re given full credit for the amount in the current valuation of the marital interest.
- What is the fair market value for the business if you sold it today?
The most prominent issue, and the most often disputed, is the current value of the business. If you sold your business, what would the sales price be? This is often a debatable number, but utilizing a qualified third party to appraise the business is critical. Your Oklahoma divorce attorney should retain an expert in your case and the valuation will be used as evidence at trial. Do not obtain your own valuation without consulting your attorney first.
- What other assets in the marriage could be used to offset the business?
The divorce court will divide the entirety of your marital estate, including your business, marital residence, real property, personal property, and retirement and investment accounts. It is not uncommon to offset any claim for a spouse’s interest in the marital business by utilizing other marital property. If you have a business worth $1 Million, and home worth $1 Million, then granting one party the business and one party the home may be an equitable division of the marital estate. Just because the business is a marital asset, does not always mean you’re going to have to liquidate it in the divorce.
Contact Our Oklahoma City Divorce Lawyers Today
Utilizing an Oklahoma City divorce attorney with knowledge in business law is beneficial to entrepreneurs facing divorce. Protecting your business in the divorce is critical to your long-term ability to support your family and maintain your obligations. Don’t leave the issue to be addressed without a knowledgeable family law attorney to assist you, ensuring you and your life’s work is protected.
Contact us by calling (855) 973-8877 at your earliest convenience.