When clients consult with us, we are often asked whether or not the soon to be ex-spouse will be entitled to half of a business due to a divorce. As with most family law cases, it depends. Check out our previous blog about division of marital property and the Equitable Distribution Law in Arkansas. In some cases, a business does fall under the rules of the Equitable Distribution Law, but it is abundantly clear that “equity” is in the eye of the beholder and the accountant. There are things you can do to protect your business before you are headed down the divorce path. Your ex could end up as your business partner if you are not careful. Remember, Christina and Tarek El Moussa from the wildly popular television show Flip or Flop? They built an empire together; therefore, they continued to do the show after their divorce, which I’m certain wasn’t an easy accomplishment and not always pleasant. If your ex does not become your business partner, you could find it necessary to sell the business to raise some cash to give him or her their equitable portion of the business or worse you might lose the business to your ex.
Here are a few things you can do to protect your business from divorce:
If the divorce is already in the process and you have not done any of the above steps, you may still be able to keep the business as your own. You can offer your spouse other assets in return for a waiver of rights to the business. You can also validate your need to keep the business viable in order to pay spousal support and/or child support payments. Keeping the business intact to remain financially solvent to make support payments can be favored by courts as well.
Handling disputes relating to asset division is an important aspect of divorce and each party to the divorce process needs to have a strong advocate throughout the entire process to ensure their rights and assets are protected. Check out another one of our previous blogs discussing business valuations and divorce. Let Kevin Hickey Law Partners be your advocate. Call or email today to schedule your consultation.