California entrepreneurs who find themselves facing the process of divorce may worry about losing business assets to their spouse. Unfortunately, going through divorce as a business owner with a high net worth can be extremely complex.
Understand that the business can be part of a property battle
During a high-asset divorce, a business can be one of the most prized possessions of the divorce. If you own a business with other partners, your former spouse may be entitled to becoming a co-owner of the business. This means trouble not only for you personally but also for your business partners. Fortunately, having prior legal agreements established with your business partners can help to avoid some of these problems.
Realize that your business will need to be valued
When you undergo a high-asset divorce, everything is going to be appraised or valued. It’s best to list all of your assets and liabilities out on paper to start. You need to go down through your list of assets and have each one evaluated by a professional appraiser. When it comes to your business, you’ll need to have it appraised at the time of your divorce. You can’t just base the value of your business off of past appraisals.
Know that there are alternatives
While you may think that your business will be in shambles after your divorce, this doesn’t have to be the case. In many circumstances, there are various ways to help ensure that you retain ownership in the business after your divorce. One of the most common alternatives is to provide your former spouse with other marital assets that are of equal value to their stake in your business.
Going through a divorce can be a complicated process, and trying to properly divide up all your marital assets and liabilities can be a task in and of itself. When it comes to the future of your business, it’s important to understand what can happen during a divorce and what you can do to help prevent losing ownership stake in your business.