You have worked hard to build your business from the ground up. Though there were some lean and difficult years, you have persevered and now your business provides you with a handsome income and plenty of security. Why would you want to take unnecessary risks with your business’s future? Yet that is what some business owners do when they fail to take steps to protect their business during a divorce.
Steps to Help Protect Your Business
In a divorce, the court will look at the marital property of the divorcing couple and divide this property in a fair and equitable manner. “Marital property” can include a business if the business was started while the parties were married or if was operated and grew during the marriage. Your spouse may attempt to obtain an interest in the company or a significant amount of its assets, but this can be combatted by following some simple tips:
Make sure the business is accurately valued. Speak with your attorney about choosing an appraiser who will value your business appropriately. If your business is valued too high, your spouse will be entitled to a larger value of assets. For example, suppose your business is only worth $500,000, but it is appraised at $750,000. If the court were to divide the value of your business equally, your spouse would walk away with $350,000 – $100,000 more than he or she would have if the business was accurately valued;
Terminate your spouse’s employment. The more your spouse contributes to the business, the stronger his or her claim to being awarded part of your business. It is important, therefore, to minimize your spouse’s involvement in your business as soon as possible;
Keep your business’s finances separate from your personal finances. Do not commingle your personal finances and your business finances – especially if you started your business before your marriage – as this can make it difficult for the court to determine what should be divided and which assets should not be divided; and
Look for ways to keep the full value of your business. A court must treat each party equally during property division. It does not have to divide every single asset, though. If your marital assets are worth $400,000 and your business is worth $100,000, the court will typically want to make sure that each spouse is awarded $200,000 worth of assets. If you keep the full value of your business ($100,000), the court will look for $100,000 in additional assets to award to you and give your spouse $200,000 worth of assets. See if you can negotiate with your spouse or persuade the court to award your spouse other assets in exchange for keeping the full value of your business.
Work with a DuPage County Divorce Attorney
Call on the DuPage property division lawyers at Arami Law if you own your own business and have filed for divorce. We will work aggressively to help you keep control of your business. You can reach the offices of Arami Law by calling (212) 312-1399 or by contacting us online.
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Sunday, August 08, 2021
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