Do you own your own business or have an interest in company or professional practice? Are you considering a divorce and searching for strategies to allow you to keep your business during a Louisville divorce? You’ve invested years of hard work, money and effort to build your business. What are some actions you can take to protect your interests?
If you owned your business interest before the date of your marriage and have not used any marital funds to keep it going it is very possible the business will be your separate property – which is not subject to division during your divorce. If you acquired the business after the date of your marriage it is more likely to be subject to marital property analysis and ultimately division.
How much did your spouse participate in the business? If each of you worked actively and contributed equally to the company it increases the likelihood the asset will be considered as part of marital property. It is important to note the Court will look at your spouse’s contributions over a long period of years. Making changes in the short term for the sake of the divorce will not change the base equation.
One of the strategies to allow you to keep your business during a Louisville divorce is to keep business finances completely separate from marital finances. Company finances should always be completely separate from personal finances as this is a crucial element in protecting the “corporate veil.” You should be paying yourself a reasonable salary and leaving other profits within the company. This can help to protect your business during the process of a divorce.
Marital property in a Louisville divorce is generally to be divided equally between the parties. In order to keep your business it will usually be necessary to “offset” any marital interest your spouse has in the company.
The Court will seek to establish the valuation of the business interest. Hiring an independent expert analyst to establish the valuation of your business interest is another of the proven strategies to allow you to keep your business during a Louisville divorce. There are many ways to properly value a business. The assessment of an expert can work in your favor as you work to keep your company.
For example, a newer business may have a much lower financial value and a high debt to income ratio. Some businesses have little or no assets and are based upon the expertise or skills of the business owner. Your business may have little or no value without you, and this can work in your favor during the process of a divorce.
Another of the strategies to allow you to keep your business during a Louisville divorce is to carefully analyze and establish the value of all marital assets. Ensuring an accurate assessment of existing assets is especially important as you work to offset the marital interest in the business. Consider the assets you wish to protect and those you may be willing to give up as part of the property settlement negotiations.
What other alternatives are available to offset any marital interest in the business? It may be important to obtain a business loan or to provide your former spouse with a secured interest in your company. You may also wish to consider an instrument which allows you to make regular payments to retire their marital interest in the company over time.
The experienced, proven divorce and family law attorneys at Dodd & Dodd work with you to develop and implement strategies to allow you to keep your business during a Louisville divorce.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.