Owning a business, no matter the size, is no easy feat. You’ve worked long hours and stayed awake at night worrying and envisioning your company’s future. Now that you and your spouse are moving forward with divorce, you might be dreading the fate of the business you worked so hard to build.
A prenuptial agreement can clear up ownership of a business ahead of time, but many couples don’t think to make one until it’s too late.
Because divorce involves splitting assets fairly between you, you might be afraid that you will both end up owning half of the business or that a judge would force you to sell it and divide the value. However, this does not have to be the case.
In this type of high-asset divorce, one partner is likely to have more income or property than another partner. Virginia is an “equitable division” state, meaning that you will not each receive exactly half of everything you both had in marriage. Instead, a judge will determine a fair way of dividing money and property.
If you owned your company before marriage, there’s a chance a judge would consider it to be separate from the assets you share. There are many ways that your business could start to blend in with your other marital property, so it’s best to plan ahead for your business in case marriage turns sour.
If you co-owned the business together or you formed it after marriage, however, the division could be very different. You will most likely negotiate to figure out if one of you will walk away from the business and, if so, who gets to stay. In exchange for keeping the business, you might have to lose other assets that you shared in marriage to keep the divorce equitable.
With so much at stake, you may want to contact a divorce attorney at Lutins & Pilgreen to defend your portion of the business. The intersection between divorce and business is a complicated legal area because so many factors affect the outcome.