Divorcing spouses will have emotional and practical challenges to address. Handling property can be emotional and may also be a practical consideration. Many couples will focus their property division concerns on real estate or retirement accounts because those assets are so valuable.
However, if you own a small business, the company itself could also be a point of contention in your upcoming divorce because it represents both value and future income potential. Especially if the business relates to your degree or your family heritage, you may feel very strongly about what happens with the company and your divorce.
You need to employ the right approach if you hope to protect your company when you divorce. What are two crucial considerations you will need to address regarding the business in your upcoming divorce?
What happens to your ownership interest
For many couples, the ownership of the company or at least its value will be a sticking point in property division matters. While your spouse may not have any interest in actually running the company, they may want part of what the company is worth.
You don’t necessarily have to give them partial ownership to divide it fairly in your divorce. You could instead perform a business valuation and find a way to give your spouse an appropriate amount of marital assets from a different part of your marital estate.
Can both of you continue working there?
If your spouse also works at the business, employment arrangements may be the most pressing negotiations the two of you need to complete. Regardless of how amicable your divorce has been thus far, attempting to work together even after the divorce could prove very difficult.
If you decide to continue working cooperatively, you will need to negotiate the contract to govern that relationship and also your expectations for one another. If you want your spouse to leave, you may need to offer some kind of transitional support until they find another job that allows them to support themselves and any children that you share.
Sometimes, business owners have to become very creative and their approach to property division matters. Realistically addressing the biggest issues related to your company will help you achieve the best outcome in your pending divorce.