Q. How to Divorce-Proof My Company
A. There are many issues to focus on during a divorce, including what will happen to your business and its assets and liabilities.
If you have a company of any kind, you will want to make sure you are protecting it in the best way possible, just in case your marriage fails at a later date. Fault does not matter, nor does the length of time you have been married or other circumstances surrounding your divorce. What matters is taking the time to divorce-proof your company from the time of its very creation, so you do not have as many worries to contend with if divorce becomes inevitable.
Your divorce business valuation can be vital, as well. If you want to protect your business from losses during a divorce, the valuation on that business has to fit with the other assets and liabilities that are being divided between you and your spouse. If you get a lot of the assets, you may also get a lot of the debt. That is something for which you must be prepared. However, if your business has a lower valuation, that can mean carrying a lower debt level, as well. This can benefit you in the long run and make it easier – at least financially – for you to move forward after a divorce.
A San Diego Divorce Attorney Can Help With Your Business Assets
A San Diego divorce lawyer can help you determine what you need to do in order to make sure your business assets are protected in your divorce settlement. That is why a California family law firm is so important to consult with as soon as you determine that you will be divorcing. If there are changes that need to be made to your business at that time, advice can be given to facilitate that. Setting your business up to be divorce-proof from the beginning, though, is the best way to ensure that you will be protected financially and professionally, no matter what takes place in your personal life.
Determining who gets the debt when a marriage ends can become a significant part of divorce business valuation. There are two ways that who gets the debt is typically decided.
- 1) One is that the debt is evenly distributed based on the distribution of the assets.
2) The other is that the level of debt taken on by both parties is affected by whether the debt was originally intended to benefit both of them. This is often the case with business debt because taking on more debt to get a business off the ground or allow it to grow can provide a large benefit to both parties in a marriage.
In the divorce cases involving business ownership, it may be unreasonable to assign that debt to only one partner because the value of that debt was much more than just one partner taking on debt for something he or she wanted to buy. Instead, the debt was used to better the lives of both parties to the marriage in a significant way, and may have also benefited children and relatives.
Consult with a Lawyer to Learn More about Divorce & Your Business
In other types of divorce cases, debt levels may be assigned more evenly, even if one party (the business owner) was the one who actually initiated the debt. If you think you need to divorce-proof your business, you may want to contact a San Diego Divorce Lawyer for a case evaluation to talk about your specific business ownership situation.