Saturday, September 12, 2009

What Happens to My Business if I get Divorced?

That is the question posed by Divorce Articles and Advice in the blog post, Does divorce mean my ex can get a hold of half my business?.

I think the English answer is not so different from the Indiana answer:

REALITY: It is very rare indeed for a business to be sold just because of a divorce and the relevance of business is often that it produces the income to provide for any children. If the business can afford a lump sum and your ex-wife needs the financial support, you may have to take out funds for that purpose. Normally though, the main relevance of a business, apart from producing the income, is that its rough value goes into the pot when calculating the overall assets.

Here, the spouse's interest in the business would be generally part of the marital pot, but then things can get complicated. Let me list the complications:
  1. Whether the business is solely owned by the spouse or if there are co-owners.
  2. Whether the business is a Limited Liability Company and what are the terms of the operating agreement.
  3. Whether the business is a corporation and what are the terms of the corporation's by-laws.
  4. How to value the business.
  5. Was there a prenuptial or post-nuptial agreement?
And these are only the obvious complications.

Suggestion for any business owner facing even the possibility of divorce - get yourself to a lawyer.

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