Divorce isn’t just a personal and emotional change—it has real financial ramifications as well. Among the most pressing is the division of marital assets, which could include a spouse’s ownership interests in a family business. If you’re a family business owner in Winston-Salem, you’ll want to know the steps you can take to protect the assets you and your family have worked so hard to build.
Learn How Divorce Courts Classify Your Business
First, you should determine how North Carolina law will classify your business ownership interests during equitable division in your divorce case. A spouse’s property may qualify as separate or marital assets. Courts typically deem assets separate when a spouse acquired them before marriage or through an inheritance or an exclusive gift. Courts also consider all assets that spouses acquire during their marriage as marital property. Thus, when a spouse acquires their ownership interest in a family business, or when the value of their interest increases during their marriage, that business interest may become subject to property division in divorce.
Obtaining Expert Valuations
You should also obtain a professional valuation of your business ownership interest, which will become essential to determining the value of any marital share of your interest that your spouse might receive in property division. Expert appraisers may use various valuation methods to appraise a family-owned business, including the asset, income, or market value methods.
Review the Company’s Legal Documents and Structure
Reviewing your family’s company’s organizational documents will further help you understand your legal options during property division in divorce. For example, the company’s legal documents may impose restrictions on the transfer of ownership interests or require you to sell your interests if you or your spouse files for divorce. Limits on the ability to transfer interests may require you to pursue other options for dividing the marital portion of your business interests.
Separate Personal and Business Finances
Another key way to protect your financial interests is by separating your personal funds and business assets. Commingling assets may convert some separate assets into marital property. Maintaining accurate bookkeeping and independent business accounts will help avoid complications that could jeopardize your business interests.
Minimize Disruption to Business Operations
At the same time, there are steps you can take to minimize the disruption that your divorce might cause for your family business’s operations. For example, you can make a concerted effort to avoid letting the personal issues in your divorce trickle into the company’s workplace. However, depending on your role in the company, you may need to address your divorce and its potential impact on the business with your employees and other stakeholders. Furthermore, you should also prioritize maintaining customer and supplier confidence in your family business’s continued operations and success.
Explore Settlement Options
Finally, an experienced lawyer can help you evaluate potential settlement options that protect your interests in your family’s business. For example, you might agree to “buy out” your spouse of their marital interest in your ownership stake or compensate them for their share by agreeing for them to take other marital assets of equivalent value, such as the marital home or second properties. Legal counsel can identify and address considerations or complications in a proposed settlement, such as tax implications, associated with a solution.
Contact an Experienced Divorce Attorney in Winston-Salem
You and your family have worked hard to build a business that will stand the test of time. Don’t let a divorce undo that effort. Instead, contact Greenwood Law today for an initial case evaluation with an experienced divorce attorney in Winston-Salem, NC, and let’s talk about protecting your family business.