Can I Continue Owning My Business After My Divorce?

 Posted on March 15,2023 in Divorce

Going through a divorce can be difficult, regardless of your circumstances or the complexity of the issues you will need to address at the end of your marriage. If you own a business, you may be worried about what will happen to it during your divorce. You may have built the business from the ground up during your marriage, or it may have been in existence before you got married. In either case, there are several important factors to take into account if you plan to keep ownership of the business after your divorce.

Factors to Consider When Dividing Marital Property

As you look at how ownership of your business will be handled going forward, the first thing to look at is whether your business was acquired during the course of your marriage. If so, then it will typically be considered marital property—meaning that it will be subject to division between you and your spouse during your divorce. Even if you owned your business before getting married, you may need to look at whether it increased in value during your marriage and whether your spouse contributed to this increase. If so, then your spouse may have an ownership claim over a portion of the business.

You may also need to consider a prenuptial agreement made between you and your spouse before getting married, which may have stated that you will continue to be the sole owner of your business in the event of divorce. If your business was founded or acquired during your marriage, a postnuptial agreement may have been created to detail how ownership of your business will be handled if the marriage dissolves. If you have an agreement in place, this may simplify the property division process and ensure that you and your spouse are clear about who will own the business.

As you proceed with the process of dividing marital property, a business valuation may be necessary. This valuation, which will be performed by financial experts, can give you and your spouse an understanding of the monetary value of business assets, as well as the continued benefits that you can receive as the owner of the business in the years to come.

When determining how ownership of your business will be handled (if this has not already been decided by a prenuptial or postnuptial agreement), you may have a few different options. If you wish to be the sole owner of the business, you may divide marital property in a way that gives your spouse assets that are similar in value to the business. This can ensure that you will both have the financial resources you need going forward. If you and your spouse have both been involved in running the business, you may choose to continue working as co-owners. If neither of these options will be possible, then you may decide to sell the business during the divorce process. This can give you and your spouse additional financial resources that may be used to meet your needs as you embark on the next stage of your lives.

Contact Our DuPage County Asset Division Attorneys

Divorce can be complicated, especially when you need to divide complex assets like a family business while ensuring that your rights and financial interests will be protected. At Farooqi & Husain Law Office, our Oakbrook Terrace property division lawyers can advise you of your options as you address issues related to your business. We can ensure that a business valuation will be performed correctly, and we can advocate on your behalf when negotiating a property settlement. We will help you take the best steps to achieve your goals and ensure that you can maintain financial security as you move forward into your post-divorce life. Contact us at 630-909-9114 to arrange a consultation and get the legal help you need during your divorce.

Sources:

https://www.nfib.com/content/resources/legal/a-small-business-owners-guide-to-divorce/

https://www.smbceo.com/2019/11/19/how-to-value-a-small-business-for-divorce/