If you own a small business, you understand how difficult it is to start a brand-new company, navigate challenges and reach a place of success. You may have put years of time and effort into your entrepreneurial dreams, and you would do anything to protect what you worked so hard to achieve. However, a divorce could affect your business, and some of your business assets could be at stake.
As a business owner, it is in your interests to make the effort to protect your business, even before you make the decision to divorce. These protections, such as a postnuptial agreement, can be beneficial in case the unexpected happens. If you do not have a marital contract, there are important things you should know as you seek to protect your business and fight for your long-term interests.
Is it marital property?
All marital property is subject to division in a divorce. This includes anything bought, earned, collected or accumulated over the course of a marriage, even business assets and profits. It is often possible for two spouses to negotiate the terms of their property division order, but if not, state laws will determine what happens to all marital assets.
Your small business is likely marital property if you and your spouse are co-owners of your company. Even if your spouse’s name isn’t on the company papers, he or she may still have a rightful claim to some business assets if he or she contributed to it in any way. This may include contributing money for start-up costs, but it may also include contributing by taking care of the children and home while you worked.
How much will my spouse get?
The amount your spouse could get from your business will depend in part on the value of the business and all of its assets. There are different methods that can determine what your business is worth, and this will determine the final property division order. Of course, you have the right to negotiate a reasonable out-of-court decision regarding your business assets.
What’s going to happen?
If you have concerns about your marital property and what will happen to your company in your divorce, you do not have to navigate these complex issues alone. It is in your interests to work with an experienced Colorado attorney who can help you negotiate reasonable terms and pursue a strong post-divorce future for your small business.