Law Offices of Indu Srivastav, APLC
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Protecting business interests in a divorce

Most Fullerton area entrepreneurs and business owners are excellent planners. However, divorce is often an event they do not anticipate until their marriage is ending. Divorce is not always easy to navigate when there are business interests to consider. While one spouse may have worked hard before and during the relationship to get the company off the ground, her or his partner may have contributed time and effort and other resources to help support it. 

There are more than personal assets at stake in a divorce when there is a business in the mix. Here are a few steps potential divorcees can take to make it easier to prevent business interests from becoming spoils of the separation. 

Identify personal and mixed property/interests 

Many couples blur the lines of ownership when they contribute personal and marital funds and time to the business. The use of marital funds forces a change in ownership from private/personal to joint. Both spouses are entitled to their fair share of marital/jointly held assets. Identifying which portions of the business belong to both parties is not always easy, especially if the union is a long-term one. An accountant or financial expert can inventory all business interests and categorize proper ownership. 

Know the true value of the company 

Many divorcees assume a company’s value includes the blood, sweat, tears and personal resources put into it. The problem with relying on this method is one spouse may not be honest about the organization’s true value and lowball it in an attempt to keep her or his partner from getting a fair share. To keep the playing field even, it is important to get a proper business valuation on the assets, market value and income or profits. Once these numbers are known, both parties are in a better position to negotiate a fair and proper settlement to protect their business and personal interests. 

Negotiate a better deal 

There is a common misconception that in divorce, both spouses must split the company equally. There are a variety of ways for a business owner to protect business interests without having to give up most or all of what she or he feels is fair to the soon-to-be ex-spouse. Both parties can offer personal and marital assets in exchange for business ones to help sweeten the deal in the divorce settlement. Carefully listening to each other’s demands and being flexible in negotiations can help divorcees reach a fair and amicable settlement regarding the business.

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Law Offices of Indu Srivastav, APLC
1400 N. Harbor Blvd., Suite 601
Fullerton, CA 92835

Phone: 714-515-5008
Fax: 714-515-8338
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