Many divorcing couples are concerned about how they will divide property and assets such as the family home, cars, and retirement accounts. However, divorce can become substantially more complicated when one or both spouses own a business. Suddenly, your livelihood is potentially at stake, and you do not want to risk losing the business you worked so hard to build. With so much on the line, you need a St Louis Divorce Attorney who has experience representing clients who are self-employed.
A Business as Marital Property
Missouri law requires that all marital property and assets be divided equitably before a divorce will be finalized, which includes business interests. If you own and run your business without the involvement of your spouse, you may assume that the business will be separate property and will not need to be divided. Unfortunately, the situation is usually not that simple. The income you earn during a marriage is considered to be marital property, and the same goes for self-employed income. Business interests you own during a marriage will also be marital property and will need to be divided fairly.
But what if you do not want to relinquish part of your business to your soon-to-be ex-spouse? What if your spouse has no interest in owning part of your business? There are different ways to approach this situation, and the right lawyer can help you find a creative solution that allows you to continue operations uninterrupted whenever possible.
“Equitable distribution” of property does NOT mean that everything is split 50/50. Instead, the court will look at the big picture and ensure that each spouse walks away with a fair amount of the marital property given the circumstances at hand. Often, the spouse that owns the business is able to give the other spouse a greater portion of other property – such as equity in a house – to balance out them keeping the business. To know what your options are, you should discuss your business and assets with a skilled attorney.
What if You Own the Business Together?
Matters can become more complicated if two spouses own a business together. Maybe each spouse wants to keep the business for themselves, and neither is willing to relinquish their primary source of income. There are different options for dividing a business that spouses run together, including:
- If the spouses can get along, they may continue as business partners after the divorce
- The spouses may sell the business and divide the proceeds, using those funds to each begin separate enterprises
- One spouse will buy out the other’s interests, either with liquid capital or a greater portion of marital property
If your spouse retains the business and you get the house, the division of property may be “fair,” but you may not have a way to immediately earn a living and support yourself. In this situation, your lawyer can advise you whether you should request spousal support to help you cover your expenses and bills until you find a new way to support yourself.
If You Cannot Agree, Try Mediation
Business interests are often a contentious point in a divorce, especially if spouses own a company together. This does not mean you will have to battle it out at trial and put your fate in the court’s hands, however. Many spouses can avoid the need to go to court by participating in divorce mediation. A skilled mediator can help spouses assess all the possible options and decide to compromise, reaching a solution that is mutually agreeable. Mediation can be particularly helpful when it comes to difficult decisions, such as who gets the business. You may be able to reach a resolution without the cost, stress, and delays that come with a divorce trial.
Before Marriage, Consider a Prenuptial Agreement
If you are planning to get married soon and you already run your own business, you should discuss the possibility of a prenuptial agreement with a family law attorney. As a provision of this contract, you and your future spouse can agree that you will retain all business interests in the event of a future divorce. Ensuring you have an enforceable prenup in place can save a lot of time and expense during the process, as the division of the business will not even be an issue.
Find Out How a St. Louis Divorce Lawyer Can Help You
If you own a business, you want the right divorce attorney and mediator on your side. If you are in the St. Louis area, the J. Rench Law Firm is ready to help. Call 314-725-4000 or contact us online to schedule a free consultation today.