How To Protect Your Business in Your Separation or Divorce!

How To Protect Your Business In Your Separation or Divorce!

In today’s uncertain economy, when you are dealing with the ups and downs of your business, just imagine how much worse it can get when you are faced with a separation or divorce!

What will happen to your business?   What will happen to your source of income and your future when you are dealing with the difficult issues of a separation or divorce?

Your business is part of the property division calculation when you and your spouse separate.  When you own the business solely or on your own, you have to account for the value of your business on the date of your separation.

However, your spouse is not entitled to get any ownership in your business when you own the business in your name only.   Your spouse could get spousal support based on your annual income from your business.

When you and your spouse run your business together, you and your spouse must separately account for the value of your half of the ownership of the business.

The ownership portion for each spouse is not necessarily 50-50.  For example, you could own 70% of the business and your spouse could 30% of the business.

What do you do when you and your spouse both have an ownership interest in your business and you are separating?  In many cases, it is not practical for both spouses to continue to run the business, given the hard feelings and other problems spouse face in a separation or divorce.

One option that many spouses follow is to have one spouse buy out the other spouse’s ownership interest in the business.  In this scenario, you often will get a formal valuation completed on the market value of your business.

You could also try to exchange assets to get full ownership in your business.  For example, you could give your interest in the matrimonial home to your spouse in exchange for their ownership interest in the business when these interests are close in value.

Usually the last resort is to sell the business since it is an ongoing vehicle for revenue and support.

You can see you need to do some really careful planning when you and your spouse are both owners of a business and you are separating or divorcing.

If you have any questions about your separation, divorce or family law case and you would like our help, there’s a few ways to contact our office.  You can leave a message on my Facebook law office page or call me directly at 905-434-8837.

Oh, by the way, did you know you can protect your family law rights and get essential information on settling your family law issues with your former spouse with the daily indispensable family law advice and tips at my FREE Facebook group?

Go here to find out more now: Durham Region Separation and Divorce Legal Support Group