Potential Divorce Issues for Business Owners
The divorce process can be problematic for anyone, but if you own your own business, your divorce might be particularly complex. When you own a business, your divorce is about more than just your own financial future, it’s about the financial stability of your business and the potential impact on your partners. Owning a business, be it private or public, local or international, small or large, is an enormous responsibility, and anything you do can reflect on your business. If you own a business, make sure you know what is at stake and what issues you might encounter throughout your divorce.
Your Business Could Be Treated Like Marital Property
When you go through a divorce, one of the most difficult aspects of the process is often the division of property. For many business owners, the business may be considered marital property. Oregon is an equitable distribution state, which means all property shared during the marriage is subject to division in a way that the court deems fair. This may not mean all property is divided 50/50, but rather each spouse will receive what the court sees as an equitable division.
In Oregon, businesses are deemed properties and must be properly valued before they can be divided in a divorce. In order to ascertain a business’s true value, the court will consider the company’s assets, income, and the current market. Valuation experts usually weigh in and take a thorough look at the business’s financials and viability before assessing how to divide this marital asset.
You Might Lose Other Assets in Lieu of Your Business
When you begin the divorce process, you will learn that your business is most likely the most valuable asset you own, and when it factors into the division of assets, it could significantly change what you get to keep after the divorce. In most cases, business owners elect to keep their business intact. This means the owner would retain his or her business, but the other spouse might be awarded more assets in lieu of the business. This means that to keep your business, you might forfeit other properties, like your home, your vehicles, or certain funds.
You Might Owe Your Spouse for Contributions to Your Business
In certain situations, your spouse might be entitled to more than you think. If the business was established while you were married, or if your spouse contributed to the success of the business in any way, he or she might be entitled to due compensation for his or her efforts.
The Business Might Be Split
In some cases, the spouse of the business owner may wish for a share in the business instead of receiving more assets. This is usually the case when the business is a family business where both spouses contributed to or owned the business. If your spouse is awarded partial ownership of your business, it could significantly affect your company, profits, or upset other partners or investors.
Lack of Privacy
Owning a business sometimes means you don’t get as much privacy or alone time as you might wish. Unfortunately, this can become even more of an issue when you are going through a divorce. Depending on your business, its size, and whether you are divorcing through mediation or litigation, your divorce might become more public than you might like. Court records are usually available to the public, which means your court visits regarding your divorce might be accessible to clients, potential clients, business partners, and your employees. In some cases, this might create bad publicity and feel like a gross invasion of your privacy. If you are able, seeking a divorce through mediation could help keep your divorce more private. Or, you can discuss other options with your divorce attorney to protect your privacy.If you own a business are and going through a divorce, make sure you have a competent, experienced divorce attorney on your side. Contact McKinley Irvin for help with your Oregon divorce.