A divorce is an emotional time, and you certainly have many things on your mind. You may feel fortunate to have a job you love, and running your own business may distract you from the turmoil in your personal life.
Unfortunately, you may not realize how closely your business entwines in your private matters and the dissolution of your marriage. The sad fact is that many business owners learn too late that their companies and their livelihoods are on the line when it comes time for asset division in their divorces.
Is the business fair game?
If you started your business before you got married but neglected to draft a prenuptial agreement to protect the business, you may have to face some difficult facts. Even though your business itself may not be marital property, its appreciation and other assets may be. Marital property in Virginia includes any assets you and your spouse acquire during the time you are married.
On the other hand, you may have started the business at some point after your marriage, or even partnered with your spouse. If this is the case, you may have a much more difficult time protecting the business from property division.
What are my options?
There are several ways you can deal with the business during your divorce, and the outcome may depend on how willing your spouse is to negotiate. Your first step is to seek a complete valuation of the business — its total assets and liabilities – on which you and your spouse can agree. After that, you have several choices:
- You can sell the business and split the profits, which can be a complex and time-consuming effort that will likely prolong your divorce.
- You can negotiate with your spouse for his or her share of the business in exchange for other assets or considerations.
- You can purchase your spouse’s share of the business outright or with an agreement to pay over time.
- You can decide to continue running the business with your spouse, at least until such time that this is no longer a viable option.
Each alternative has its advantages and disadvantages, and only you can know the choice that makes the most sense for you. Of course, you will want to have advice based on education and experience, and this may come from a skilled attorney. In fact, a family law attorney with a history of assisting business owners with their divorces may benefit you in many ways.