Owning a business is an integral part of your life – something you don’t want to give up until you’re ready. When you’re a business owner in the middle of a divorce, you may have concerns about what the divorce will mean for your business.
Most businesses are marital property during a divorce, meaning it is eligible for division between both spouses. Even if you’re the owner of your business, your business profits contributed to the livelihood of you and your spouse, or that your spouse helped with business plans or ideas. And if your spouse worked at the business in any role, it will also be marital property.
In Colorado, asset division is determined through a process called equitable division. This does not guarantee an equal division between the two spouses; instead, one spouse may receive a higher percentage of the assets than the other. When it comes to your business, you might not want to give your spouse any portion of something you built with your hard work.
However, you will have to figure out a way to divide the business with your spouse. Here are a few options available for you:
- You keep the company. Chances are you want to keep your business. You put years of effort into creating and developing your company, and you’re not willing to let it go just yet. If you want to keep your business entirely, you can buy out your spouse’s share or offer to give your spouse a higher percentage of other assets, such as your retirement funds.
- You both keep the company. If you and your spouse were both equally involved in the business, your spouse might not want to leave the company either. In this instance, you may consider keeping the company, but it’s important to remember that if your relationship is already rocky, it can make working together difficult.
- You sell the company. As a final choice, you can sell the business to a third-party buyer and split the profits cleanly with your spouse. If you genuinely want to keep your business, this is probably the last resort when other options don’t pan out the way you expect.
Divorce is hard enough as it is, but with a business involved, it can become even more complicated. With these options in mind, however, you should be able to navigate the divorce proceedings efficiently to ensure your business continues to stay the way you want.