Protecting your business is essential in a divorce. Lose your business, and you lose the work you put into its development, your hard-earned reputation and your source of future income.
In a divorce, it’s usually easy to focus on who gets such assets as the family home or car. Dividing up a business, however, can be a disaster for you both professionally and financially.
What needs to be considered in a divorce where a business is involved
There is no one rule governing the handling of businesses in a divorce. In Tennessee, marital property is divided equitably. A court can consider various factors when deciding what is fair.
You may have made either a prenuptial or postnuptial agreement to protect your business in the event of divorce. If you did, the first thing you need to do is review your agreement so that you’re 100% clear about what it says.
If you owned the business before you married, you might think that it’s clearly your “separate” property — but things are not so simple when it comes to the division of assets in a divorce. Your spouse may be able to claim a percentage of your business related to the value it gained during your marriage. If they played a role in that growth (whether paid or unpaid), their claim would be greater.
Even if your spouse played no direct role in your business, they could argue they took care of the house and kids, allowing you to concentrate on the company, or sacrificed their career for your business aspirations in some way.
Remember your business is not the only asset to consider in a divorce
If you prefer to keep 100% of your company, you may need to bargain with your spouse. Quite often, there are options you can use if you look hard enough. Understanding the complete picture is crucial to achieving a successful outcome when dividing property, so speak with an attorney soon about your situation.
