How Divorce Impacts Your Business
Aside from child support
, child custody
, and paperwork, you have to think about how a divorce will affect your business. Even in an uncontested divorce, the division of marital property can immensely impact your finances. Because of this, you’ll stand to lose more in a contested divorce if you don’t adequately protect your business.
refers to any assets or income that either spouse acquired during the course of marriage. It includes stocks and bonds, savings accounts, and most other assets.
If you’re planning to file for divorce, call us at 805 Family Law Attorneys to consult with a San Luis Obispo business divorce attorney. Call us today to schedule a consultation with our Atascadero family lawyers
and divorce attorneys.
Divorce proceedings take an emotional toll on everyone involved. If you’re in charge of a business
, it can affect how you manage the company and put it in jeopardy. It’s hard to think of handling a business along with daily talks with your divorce lawyers, obtaining the needed documentation, and the stress of the related child custody and spousal support orders
It’s another mountain altogether if you are a major stakeholder
. There is a chance that your ex-spouse would get a significant chunk of your stock. This dilutes your interest and can change your status in the business. Furthermore, this makes them an uninvited partner who can place the company in peril.
Now, if both you and your former spouse are senior business members
, it gets even trickier. Once the divorce process concludes, there’s a chance that they will still have authority over the day-to-day operations. If they receive a good portion of your stock, they can also rise in position.
In this case, you can either:
- Stay in the business and deal with the tension between you and your ex.
- Sell your stake and leave, which can affect the stock price.
Call 805 Law Group now to schedule a consultation.
Community Property or Equitable Distribution
You need to know how much is at stake. California is a community property area
. During the divorce, it will be an even 50/50 split. This is also the case in Wisconsin, Washington, Texas, New Mexico, Nevada, Louisiana, Idaho, and Arizona.
The rest of the states follow equitable distribution, meaning the court decides how marital property gets distributed. If neither party agrees on dividing the property fairly in these states, it becomes a tiresome process.
As you can see, divorce has an extremely negative effect on your business. Before divorce even happens, talk to our skilled San Luis Obispo business divorce attorneys to discuss the best options for you. Call 805 Family Law Attorneys
to schedule a consultation.
How Can I Protect Myself?
At the beginning of the relationship, no one will admit that divorce is a possibility. However, if you do not take the necessary steps to protect yourself, it becomes harder to save your business once the divorce proceedings start.
Here are some actions you can take to preserve your business when you’re getting a divorce:
Create a Prenuptial or a Postnuptial Agreement
These kinds of agreements are one of the best ways to ensure that you can keep your business should the marriage end. Get a prenuptial before the wedding
or a postnuptial after to determine what will happen to the business. Discuss if the business will be considered joint marital property, if appreciation of the assets will be passed, and the company’s agreed value should a divorce happen.
Manage Finances Separately
Don’t use your house as collateral to invest in your business. By keeping these assets separate
, there will be less misunderstanding about who owns what later on.
Many business owners pay themselves a lower salary to maintain liquidity. The downside is that there is more for your spouse to get should a divorce happen. If you give yourself a bigger salary, it becomes less accessible if you need to pay a settlement in the future.
Put the Business in a Trust
A trust counts as its own legal entity. This means that when you place a business in a trust, you no longer own it. In this way, the business won’t be in your name during the settlement.
Take note that there are laws against fraudulently transferring assets to a trust. If the court finds that you moved the business into the trust expecting a divorce, the court may void the transfer. If you wish to do this, do it as soon as you can.
If the divorce settlement costs more than you have available, you don’t want to be forced to sell all or part of your firm to fund it. You could avoid this dilemma if you have a whole life insurance policy that you can liquidate.
These are some of the ways you can secure your business and maintain income for yourself and your loved ones even when you get divorced. If you need an attorney to help save your business, call our experienced San Luis Obispo business divorce attorney. We’ll handle the burden of the divorce so you can focus on healing.
What If It’s Too Late?
Don’t be too hard on yourself if you did not take the above measures because you thought the marriage would last. In reality, many have been in the same situation. Don’t fret because there are still some solutions available for you.
Pay for the Settlement Over Time
You can convince your ex-spouse to take payments for the settlement monthly (such as in the form of a wage garnishment or alimony). This lets you protect your business interest and comply with your commitments.
Sacrifice Other Assets
If you wish to keep all of your company, you can try to offer your ex other assets in exchange. You can offer them the car you had as a couple or your family home. As a result, you might secure ownership of your business.
Sell at Stake
You may need access to cash instantly when the divorce settlement comes. You can sell part of your stock, maybe to employees or existing partners, to get your hands on some. Alternatively, you may also get them to agree to a buy-back at a future date.
Sell the Business
The last resort may be to sell the company. If you can’t have a healthy relationship with your ex when they get a sizable portion of the company, the only option is to bail. Take note that money from the sale will also be divided according to the law.
These are some of the options you can take. Getting divorced is a real possibility, and you need to take care of yourself on the chance that your marriage dissolves. If you want to know how to save your business from your marriage dissolution, get in touch with our competent San Luis Obispo business divorce attorney today! Call us our business divorce attorneys in San Luis Obispo and Atascadero, CA to schedule a consultation.
Talk to a San Luis Obispo Business Divorce Attorney
Divorce can be a stressful period in your life. At 805 Law Group, we focus on giving you the best results possible during these difficult times. We can handle your case with compassion and empathy, but we can also employ aggressive tactics to ensure that your rights are not violated.
Don’t wait until it is too late! If you need help with your business divorce, contact our San Luis Obispo family law office
to schedule a consultation with our experienced business divorce attorney today.