The division of marital property has the potential to be the most hotly contested divorce term, which is no small feat. There are, however, certain factors that can make the matter that much more challenging, and a primary example of this is business ownership.
If you are facing a divorce that involves a business, one of the most important steps you can take in terms of protecting your financial rights is to consult with a Fort Worth divorce attorney who is widely experienced in managing divorce cases where businesses are involved early in the process.
If one of you or both of you together started the business in question during your marriage, it’s almost certain to be marital property, which is complicated enough. If, however, one of you owned the business prior to marriage, the business may be separate property, but there are a range of factors that must also be taken into careful consideration, including:
The matter of whether or not a business is a separate or marital property, in other words, is complicated.
An early complication of business ownership as it relates to divorce is its value, which can become a sticking point that is extremely difficult to resolve. Options for obtaining a value that will guide the proceedings include:
As such, a divorce involving business ownership tends to be complicated from the start.
If your spouse is far more involved in the business than you are, they likely have many opportunities to hide, obscure, or deflect attention from specific aspects of its value – or even to hide funds outright. A business’s books tend to be highly complex, and if you don’t have a close working knowledge of yours, you could be at a financial disadvantage. Forensic accounting is often required.
Even if your spouse is generally fair, business ownership can be emotionally fraught, and the spouse who runs the business may feel entitled to it in a way that is not supported by the law – which can lead to less than forthright practices. Protecting your financial rights is paramount, which makes having professional legal guidance in your corner from the outset critical.
Generally, it doesn’t make economic sense to simply sell or liquidate a business and divide the proceeds between divorcing spouses. The value of most businesses comes from running them, which makes business ownership especially challenging in relation to divorce. If both of you run the business together, there is also the matter of one of you walking away, which leaves that spouse without an income and without the business.
Basic options include:
Finding a middle ground that protects your financial rights is challenging, and other financial matters, such as alimony, must be resolved in tandem – to help ensure that financial balance is achieved.
If you’re facing a divorce that involves business ownership, the trusted Fort Worth divorce attorneys at Mims Ballew Hollingsworth are well-prepared to get down to the serious business of skillfully protecting your financial rights, and we welcome your inquiries.
We are on your side and here to help, so please don’t put off contacting us online for more information today. We can help protect your business and financial future following your divorce.