When approaching divorce, it is always wise to build a divorce strategy, so that you understand your own priorities and how to protect them. You may be hoping to jump ship and cut ties, or you may have a lot of tangled finances and custody issues to resolve.
If your spouse owns a business, it may be a significant part of the property division process. Businesses often qualify as marital property during a divorce, which can greatly impact how each party approaches property division negotiations. You need to know how the business qualifies so that you can properly prepare and keep your priorities secure.
What if the business doesn't qualify as marital property?
The first thing to determine is whether the business is protected from the divorce, either because of the nature of your spouse's ownership and your marriage, or through a prenuptial agreement.
If you and your spouse did create a prenuptial agreement, and if that agreement protects the business from divorce, this is still good information to have. Knowing that it is not in play can help you focus your attention elsewhere.
However, if there is no prenuptial agreement protecting the business, or if the prenuptial agreement in place does not hold up to scrutiny, then the business may be a significant part of your divorce. The more involvement that you had in the business, the greater a claim you can generally make against it.
If you and your spouse operated a family restaurant where you worked, although it was in their name, you probably have a strong claim on its value. If, however, the business is something that never involves you and you do not know much about it, and if your spouse keeps the finances between your home and business clearly separated, then you may have a weaker claim.
Protecting your rights is essential
If you do find that you have a valid claim to some portion of the business, it is important to understand its real worth. A professional valuation examines every area of the business to create a comprehensive final picture of its strengths and weaknesses. This helps you understand how much value you should receive from it and alerts you to certain risks like imbalanced debt.
With a strong divorce strategy, you can assess even complicated assets like businesses and ensure that you meet this stormy season fully prepared. Whether you know exactly where you're headed or have concerns about certain parts of the divorce, a well-built divorce strategy helps address those fears and keeps your rights secure.