Getting a divorce shouldn't sound a death knell for your small business. Unfortunately, that's the position you are likely to find yourself in if you don't take preventive measures to safeguard the business during your divorce. Here are three measures that should help your business emerge from the divorce unscathed:
Keep Business and Personal Finances Separate
The worst thing you can do for your business is to mix its money with your marital assets. Sure, both things are yours, but dividing the business will be hard if its debts and accounts are mixed up with your family money. If you have been doing this before, stop it now. Don't borrow money from the business to consult a lawyer or take money from your joint (marital account) to buy business stock. Co-mingling of assets is especially risky in a community property state. In such a state, if you co-mingle business and personal assets, the business may end up becoming a marital asset that belongs to both of you.
Involve Experts in the Business' Valuation
Your divorce lawyer will be the first to tell you that they shouldn't handle all aspects of your divorce, especially when it comes to asset and debt division. Some things require the input of professionals. For example, valuing your small business is best done by a financial expert with experience in the same issue; your divorce lawyer will just coordinate the overall divorce process. Therefore, don't think it's an unnecessary expense when your lawyer advises you to hire a forensic accountant.
Know There Are Many Ways to Divide a Business
Dividing a business doesn't mean that each of you has to own half of the business or that you have to sell it and share the proceeds. There are many ways of dividing the business so that it can continue with its current ownership and management. For example, once you have agreed on the worth of the business, you can agree to give your partner structured payments that will total their half of the business after some time. Don't forget that you may have to include other factors that may affect the true worth of structured payments, such as taxes and inflation.
In addition to the above tips, you will need the help of an experienced divorce lawyer to coordinate everything. Don't do this all by yourself to save money; that money will pay itself back when it helps you preserve your business. To learn more, contact resources like Moore Robert G Attorney at Law.
When my spouse decided to divorce me, I realized that I really needed to work with a professional attorney. I started looking around for great general attorneys who would be willing to take the case, and I was able to find a great team that I felt good about working with. They were intelligent, hard working, and had been in business for years and years. This blog is all about working with an awesome lawyer who can help you to get a fair settlement in court. Check out these blogs for important tips on finding and working with an attorney.