Establishing a business with your significant other can be quite rewarding. However, this can be detrimental if you split and decide to get a divorce. Although a lot of couples only need to worry about splitting a household, those who own a small business need to review their financial situation, so they can determine their options and how the business must be distributed. A Newton divorce lawyer can be your best ally in this situation as they can give you helpful advice and protect your best interests throughout the divorce process.
Are Businesses Considered Marital Assets?
All assets acquired by a couple during their marriage are considered marital assets. The only exception is when these assets are split in a prenuptial or post-nuptial agreement. Thus, if you started the business while you were married, your stake in this business is a marital asset. Thus, the business will be distributed equitably between you and your spouse during divorce.
Even if there are prenuptial and postnuptial agreements in place, family courts will still review them thoroughly and may deliberate about their validity. But, in general, these agreements offer legal protections for you during a divorce. Call your lawyer right away to determine if your existing agreements will exclude your business from the equitable distribution of marital assets.
Understanding What Goes into the Value of a Business
If a divorce includes a small business, it becomes a high-net divorce. This type of divorce is more complicated than a divorce that does not include significant assets. Also, it requires the assistance of a financial advisor to sort out the complexities. To determine the value of a business, factors such as its income and expenses, business credit or checking accounts, stock, inventory, real estate, employee benefits and payroll, as well as business loans and debts are considered.
In a divorce, a business can be a loss if its debt and loans overshadow its assets and income. In such cases, you should still hire a divorce lawyer to review the possible division of the business. This is because a divorce also includes dividing debt. In addition, household contributions are also a factor to consider if one spouse is a homemaker and takes care of the kids while the other runs the business. In this situation, the homemaker may still get a share of the business.
How a Business Can Be Divided During a Divorce
You and your spouse can choose to sell the business and divide the proceeds from the sale. Also, you can buy out your spouse out o fit if you want to keep the business. Another option is to sell your share of the business to ex or share the business itself.
