separate property Archives The Quitmeier Law Firm of Kansas City

You’ve invested endless energy and money into your business, and now you fear that your spouse will take your life’s work away from you. Whether you own your business independently or jointly with your spouse, now that you have made the decision to divorce, you need to take steps to protect your business.

The divorce of a business owner can lead to uncertainty and instability in a business. For businesses owned by married couples, divorce can be destructive to the business if both spouses are vital to its operation and can no longer work together. However, even the non-owner spouse of a business owner may have rights in a divorce that can be damaging to the business.

Many business owners have no plan in place for their business in the event of a divorce. Planning ahead of time by having a prenuptial agreement is the best way to avoid uncertainty in the event of divorce.

However, even if you have no prenuptial agreement, there still are steps you can take to protect your business:

Obtain a favorable valuation: Arrange for a business valuation on your own. Valuations often vary widely, so you should find one that favors you.

Reduce your spouse’s role: If your spouse is working for the business, take steps to reduce their role and make their efforts seem unimportant to the business.

Pay yourself a competitive salary: Business owners often take a reduced salary in order to grow the business. If a divorce is imminent, this will cause the value of the business to seem higher and therefore your spouse’s share will be higher.

Employ creative methods to pay off your spouse’s share: You may be able to keep the entire business if you are willing to give up other assets like retirement accounts and the family home. If you need to buy out your spouse’s share of the business, you could arrange for monthly payments over time from the business’s profit or from a bank loan.

Consulting an experienced Missouri divorce attorney will help you protect your business through even the most difficult of divorces.

Once you and your spouse have made the difficult decision to divorce, one of the most difficult decisions you will face is how to divide up your property.

Since Missouri is an equitable distribution state, all assets, earnings, and debts that are accumulated during the marriage are divided equitably, but not necessarily equally. A judge may order one party to use separate property to make the settlement fair to both spouses.

Further, division of property doesn’t necessarily mean physical division. Instead, the court may award each spouse a percentage of the total value of the property, and it’s illegal for a spouse to hide assets in order to shield them from property division during a divorce.

Even in an equitable distribution state, it’s important to understand that some property can be considered separate property and not marital property. Separate property can include any property that was owned by either spouse prior to the marriage, an inheritance received by either spouse before or after the marriage, or a gift received by either spouse from a third party at any time. However, even separate property can lose its separate property status if it is commingled with marital property, such as if you deposit your inheritance from your parents into your joint bank account with your spouse.

All other property acquired during the marriage will likely be considered marital property, regardless of how that property is titled. So even if your retirement plan is titled in your name alone, guess what? It is marital property, and your spouse still has a right to some of it.

The court will consider several factors in equitable distribution, such as the length of the marriage, the income or property brought into the marriage by each spouse, the income and earning potential of each spouse, and the needs of the custodial parent to maintain the lifestyle for the children, amongst other factors.

Because there are so many variables, it’s difficult to predict how a judge will rule. Therefore, it’s a good thing if you and your spouse can agree on how to divide up the property and debts yourselves without court intervention.

If you are considering divorce, it’s important to retain the services of an experienced Missouri divorce attorney to protect your rights to your property.

Protecting Your Business During a Divorce

Splitting Multiple Properties During Divorce In Missouri

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