No matter what brings divorce knocking at your door, the effects are often devastating if you do not approach the process with a clear understanding of your priorities. A strong legal strategy can help you protect these priorities, but only if you take the time and effort to build it before you are too far into the process.
This principle proves true for nearly all divorcing spouses, but it is particularly crucial for individuals who own businesses to consider these risks as soon as they believe they are headed toward divorce. In most instances, divorce negotiations are about difficult compromise. It is very difficult to keep a business together while a marriage comes apart, especially when the business may qualify as marital property.
Is your business at risk?
Divorce law often classifies a business as marital property, if it meets the qualifications. This may occur if you founded or acquired ownership of your business after your marriage or if you failed to protect a business you already owned with a prenuptial agreement.
Depending on your specific circumstances, you may or may not need to prioritize your business in your negotiations, but it is crucial to know whether it is at risk as soon as possible. The longer you wait to begin building your divorce strategy, the fewer options you have and the weaker your preparations may be.
It is not always easy to know whether your business qualifies as marital property, so you must examine your situation carefully. Otherwise, you may negotiate away property that you don't need to sacrifice in order to keep a business that you may or may not need to save.
Is saving your business a priority?
If your business is marital property, then you must decide fairly quickly whether you want to prioritize saving it. A business that produces strong profits may help to rebuild after the dust settles, but if it is already failing, you may not want to sink more of your assets into keeping it.
Negotiating around a business is rarely simple, because businesses may include assets and liabilities, or may involve commitments to the parties, including employees. If you believe that your business plays a part in your divorce negotiation at all, it is wise to have it undergo a professional valuation so that you understand its true worth and can negotiate confidently.
If your spouse does have a valid claim to some of the business's value, then you must carefully consider how to balance the needs of your business with your other priorities in divorce. The sooner you begin piecing together your divorce strategy, the more options you have to protect your rights and focus your time and energy on your family and your own needs.