When you own a business and are going through a divorce, you need to keep in mind how your divorce could affect your business. Depending on your spouse’s role in the business and if you started it before or after your marriage, your business could be marital property and be subject to division during your divorce.
Louisiana is a community property state, which means that your marital assets may be divided in half rather than equitably. For example, if you started your business during your marriage, your spouse could be entitled to half of its value.
Remember the following as you approach your divorce, so you can take steps to protect your business.
Your spouse may be entitled to a portion of the business
The first thing to remember is that your spouse might be entitled to a portion of your business if the business grew in value during your marriage or was started during your marriage. You will need to have the business appraised to determine its value and then look at the overall value of your marital estate to see if there is a way to buy out your spouse’s share (if that’s what you want to do).
The 50-50 split doesn’t necessarily have to include your business
Another thing to keep in mind is that the 50-50 division of your assets doesn’t necessarily need to include your business assets. You may have the option to give your spouse other assets in exchange for protecting your business. That could be helpful if you want to completely buy them out. On the other hand, if they want to take over the business, you could also consider a trade for assets that you value.
If your spouse is a partner, your business contract might play a role in the divorce
Sometimes, contracts can override other rules or guidelines. If you have a business contract, you may be able to use it to help protect your holdings.
These are a few tips to remember as a divorcing business owner. You need to go over your contracts and remember that your spouse may be entitled to a share of your business, so you can prepare for future negotiations.