The Financial and Personal Effect of Divorce on Your Business

 Posted on May 21,2020 in High Asset Divorce

Keeping your business separate from your marriage is difficult to accomplish when you are getting a divorce. There are many ways that your business can become part of your marital property, whether you:

• Started the business during your marriage
• Grew the business’s value during your marriage
• Invested marital money into your business
• Mingled your business properties with your marital properties

For many small business owners, their spouses may be involved in the business as either an employee or part owner. A divorce can affect your business’s finances and your working relationship with employees and partners. However, you can minimize any negative impact on your business with the help of a divorce attorney.

Financial Effect

When your business is marital property, it means that your spouse can claim an equitable share in the business. If you already co-own the business with a partner, losing a portion of your ownership in the business could change your power dynamic with your business partner. Having a new co-owner could also be disruptive to your business, whether it is your former spouse or someone else they sold their ownership stake to.

Many divorcees realize that it is not in their best interest to become a co-owner in their spouse’s business if they were not previously involved. If your spouse relies on you to make support payments, they should want to avoid doing anything that will hurt the business. Your spouse may let you keep full ownership of your business but will expect you to give them other marital properties of equitable value in return.

Personal Effect

If your spouse works at your business, getting a divorce can create an uncomfortable situation for yourself and your employees. If you can, it is advisable to no longer have your spouse as an employee at your business, which may require other employees to pick up your spouse’s work responsibilities.

If your spouse was never involved in your business, your divorce will still have a personal impact on your work. The time you spend working on your divorce may interfere with your ability to run your business. As a result, you may need to either forgo some business opportunities or rely on your employees or business partners to handle some of your workload.

Contact a Kane County Divorce Attorney

When you own a business in a divorce, you need to prioritize protecting your business during the division of marital property. A St. Charles, Illinois, divorce lawyer at Goostree Law Group will conduct an accurate valuation of your business and help you protect its viability. Schedule a free consultation by calling 630-584-4800.

Source:

https://www.reuters.com/article/us-column-cohen-divorce/divorce-has-immense-impact-on-small-businesses-idUSTRE78R4FG20110928