Divorce can cause major upheaval in anyone’s personal and professional life, particularly if one or both spouses come to the negotiation table without a clear understanding of their priorities. This is doubly true for business owners who may see their divorce sink their business if they don’t protect it.
If you are a business owner in West Virginia with divorce in your future, now is the time to begin building your divorce strategy. Keeping your business intact may require significant sacrifices in other areas. You must determine how valuable the business is to your life after divorce and what you are willing to do to keep it off the property division table.
Did you create a prenuptial agreement?
If you took time to create a prenuptial agreement, your business may already have the protections it needs. However, you should still review your agreement carefully so that you understand its terms and anticipate any areas of conflict. Courts often dismiss prenuptial agreements if one or both parties challenge them, or they may strike certain passages from an agreement.
If you do not have a prenuptial agreement protecting your business, you still have options, but you must work quickly to keep the business safe.
Does your spouse have a valid claim?
West Virginia typically allows spouses to keep personal property that they held prior to a marriage, unlike other states that use community property laws. However, if your spouse contributed to your business in some way, then they may have a claim on some of the business’s value.
You may have grounds to claim the business as personal property if your spouse did not have involvement with the business and if you managed to keep your personal and business finances separate. The more commingling that occurs between business and personal assets, the more difficult it is to claim that the business is personal property, not marital property.
Understanding the business’s value
If your spouse has a valid claim to a portion of the business’s value, then you need to understand exactly what the business is worth before you begin negotiating property division. A third-party business valuation assesses the complex assets and liabilities in your business and gives both of you a clear understanding you can use to negotiate fairly.
Depending on the nature of your other assets, you may compensate your spouse with other property to keep your ownership, or you may need to work out a structured payment plan to compensate them over time.
However you choose to move forward, you should create strong, clear divorce objectives using high-quality legal resources and guidance as you need them. A well-built divorce strategy helps you keep your eyes on the future ahead while protecting your rights in the present.