Business owners are used to planning ahead, but there are some things that even the most prepared of us may not see coming. A divorce may come completely out of left field, presenting one with more complex problems than usual. Dividing marital assets may be difficult at the best of times; however, California residents who own businesses with their spouses may find that this presents greater issues than how much one is entitled to as his or her share.
If the business was started prior to the marriage, a prenuptial agreement may be in place, which may already state how the business will be treated in the event of divorce. If one is in a position to prove that his or her contribution was substantial, and the terms of the agreement do not reasonably take this into account, then it may be worth presenting one’s case to argue for a fairer settlement. This also holds true for those who have created a business during the course of the marriage. The burden of effort may have fluctuated significantly, depending on the involvement of either spouse at varying stages.
If it is possible, then remaining as co-owners and continuing to run the business together may be the best way forward. It avoids the need to find the means to buy out one’s spouse, which can place a substantial weight on one’s personal finances at a time when they may already be facing a strain. Selling the business may be an option, if working together will prove impossible; however, this may take some time to arrange, and assessing the value of the business may not be simple or straightforward.
California residents may find it difficult to keep things amicable, but doing so is in the best interest of everyone involved. Business owners will be familiar with the need to maintain a cool head during negotiations, and divorce is no different. Emotions are bound to run high at times, but giving in to them will not allow one to think clearly about the best way to move forward, either personally or professionally.
Source: marketwatch.com, “How to protect your family business during a divorce“, Daniel Thompson, Feb. 10, 2017