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Divorce Involving a Business

Handled by Skilled Divorce Lawyers in Foley

Divorce is virtually always difficult for the parties involved but it can become much more complicated and painful if a business is at stake. Your business may be your most valuable financial asset and divorce has the potential of seriously harming—if not destroying—that asset. When faced with the possibility of divorce, it is imperative for any business owner to seriously consider the financial toll of divorce and, if necessary, plan accordingly.

In order to properly protect your business from the harmful effects of divorce, any business owner must understand the differences between separate property and marital property. Understanding and maintaining this distinction may mean the difference between keeping and losing your business to divorce. Typically, marital property includes all assets and income accrued by either spouse throughout the course of the marriage.

This might include your:

  • Family business
  • Real estate
  • Bank accounts
  • Mutual funds
  • Life insurance
  • Stock options
  • 401(k)
  • Pension plans
  • Savings
  • Automobiles
  • Boats

Marital Vs. Separate Property

Alternatively, separate property might include property given as a gift to one spouse, a property or business that was owned before the marriage, a property or business inherited by solely one spouse, or even damages obtained from a personal injury suit. Importantly, a property or business that was originally characterized as a separate property could potentially become marital property through either spouse’s actions. For instance, if a spouse entered their marriage with sole ownership of a business but during the marriage re-titled it to include their spouse, the court may find that the business was re-categorized as marital property.

How to Protect Your Assets

So how does a small business owner protect his or her business from the financially devastating effects of divorce? Like any asset, the most secure way to protect a business from the equitable divisions of divorce is through agreement. Marital agreements typically appear in two forms, “Prenuptial” and “Postnuptial.” Valid prenuptial agreements are voluntarily agreed upon by both spouses prior to the marriage, while postnuptial agreements occur after the spouses are married, but before divorce.

In either case, the use of a marital agreement allows each party to decide in advance what assets and property will be considered separate property and marital property in the event of divorce. This agreement can provide a blueprint for the parties on how the business will be maintained if and when divorce occurs. If one of the parties owns a substantial share in a business, a marital agreement can effectively protect that asset from equitable division and therefore maintain its status as “separate property.” Absent a marital agreement, married business owners run the risk of having their most valuable asset divided by the court.

Contact Caldwell Wenzel & Asthana

At Caldwell, Wenzel, & Asthana, PC we offer married and unmarried business owners the legal guidance required to properly protect their most valued assets. If you want to learn more about how your business may be affected by divorce proceedings or wish to have an in-depth discussion about the ramifications of and process for divorce, call the Foley divorce lawyers at Caldwell, Wenzel, & Asthana, P.C. any time.

To set up a free initial case evaluation with our Foley divorce lawyers, call us today at (251) 444-7000 or contact us online.

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