There are few things more stressful than divorce, however, if you are a business owner, the fate of your business may also be in jeopardy. This is unacceptable, and if you find yourself in this unfortunate situation, you must read on and reach out to our experienced Bristol County divorce attorney as soon as possible. Here are some of the questions you may have:
Is a business considered marital property?
Generally, in contested divorces, courts will set a value for your assets, dividing them into marital and separate property. Marital property is defined as assets acquired during your marriage, such as your house, car, retirement funds, and, in many cases, your business. That being said, there is exempt property in divorce, which can generally circumvent the equitable distribution process. Exempt property can include assets acquired before or outside of the marriage, such as gifts, inheritances. Unfortunately, marital assets are generally left unprotected in a divorce, which is why if you are a divorcing business owner, you need an experienced attorney on your side.
How do Massachusetts courts value businesses in divorce?
Massachusetts courts will consider several different things when deciding who gets your business. To get a clearer idea of how your marriage functions financially, they will ask you various questions about your business, demand certain documents regarding your business expenses and revenue, and, in some cases, even employ a financial analyst to investigate your business. During this time, you must ensure you submit all values both accurately and honestly, because if you do not, you may be under investigation by the IRS. Do not let this happen. Our firm will work to ensure you submit all the necessary documentation to avoid unwanted investigations.
What can business owners do to protect their businesses from divorce?
Fortunately, there are several things you can do to protect your business from a divorce. The most common and best line of defense is drafting a prenuptial agreement with your spouse before you are married. Doing so allows you to lay out all terms of your divorce, should you ever get one, in a legally-binding fashion. Therefore, you can clearly state, in this agreement, what will happen with your business, should you ever get divorced. Additionally, you can draft a postnuptial agreement, which functions essentially the same as a prenuptial agreement, only you create these after you are already married. Lastly, spouses who jointly own a business are allowed to create a shareholder agreement, which is also a great form of protection.
Contact our experienced Massachusetts firm
For over 30 years, The Law Offices of Cynthia L. Hanley, P.C. has provided quality legal support and representation for clients in Bristol County and all of Massachusetts. Our firm’s experience eases the stress of clients while providing the legal services they deserve. If you need help through a contested divorce, contact The Law Offices of Cynthia L. Hanley, P.C. for a consultation today.