For couples to fairly divide their assets during divorce, they need to put together a list of what they own and establish what those assets are worth. For some couples where one spouse makes far more than the other, there may also be a need for spousal support, which people also call alimony.
Couples with more valuable assets often have a harder time figuring out how to share property when they divorce. A business can easily be the biggest complicating factor in a divorce, as it can be hard to figure out what it is worth and maybe even harder to divide. When people start negotiating a way to fairly handle a business that is at least partially marital property, they could easily make major mistakes that have lasting implications for their post-divorce finances.
If a couple owns a business, each individual needs to be on the lookout for signs that their spouse has laid claim to any particular business asset twice.
People may count future income more than once
The business valuation process can be very complicated, and there are different systems used for different types of companies. One of the more common types of business valuation involves calculating the likely future income of the business and using that as part of what establishes the company’s overall value.
This approach is perfectly valid and useful for many small and family-owned businesses, but it does put someone at risk of the so-called double dip. Their spouse may then also try to claim spousal support when looking at their spouse’s future income, which comes from the business. Typically, they should only have to account for that future business income one time rather than using it both as part of the property division process and then also for support matters.
Those with valuable assets often need guidance
Mistakes when dividing a business could have lasting implications for the future solvency of the company and someone’s ability to rebuild after the divorce. Although almost anyone planning a divorce with benefit from legal advice and support throughout the process, those who own complex assets like businesses need that guidance even more than the average person.
Learning about the common mistakes that occur during divorces involving businesses could help someone avoid those mistakes themselves. Seeking legal guidance is a good place to start.