Going through a divorce is always going to be complicated, but you might run into a few additional problems if you own a small business. In addition to protecting your business’s assets, you also need to make sure the separation isn’t going to impact your day-to-day operations. Try these five tips that will help you get through your upcoming divorce without damaging your business.
1. Start the Conversation Early
While it might seem easier to hand your spouse the divorce papers and walk away, it’s always preferable to avoid a lengthy legal battle. If your marriage is coming to an end, you need to sit down with your spouse and have a serious conversation. You need to be as honest as possible during that conversation, and even though strong emotions will be involved, you need to address the practical issues concerning your business in a calm and mutually respectful way. Starting this process off right could help you avoid quite a few issues down the road. Pull together your financials, current budgets, house expenses, and paperwork from the business, along with tax returns.
2. Take a Fresh Look at Your Prenuptial Agreement if You Have One
As soon as you’re sure your marriage is going to end, you need to revisit your prenuptial agreement, if you have one. In addition to covering your personal assets, your prenup might also protect your business. Taking a fresh look at this agreement will give you a much better idea of what to expect in the coming months. Those documents usually cover marital property, personal assets, business assets, childcare, debts, and investments.
If you don’t have a prenuptial agreement, see if you and your spouse can come to an agreement on your own about all the above issues. Emotions may be running high, so this may be difficult. If you can’t agree but you still don’t want the expense and turmoil of hiring attorneys and going to court, seek out the advice of an experienced divorce mediator, who can help you come to a mutually satisfactory agreement.
3. Assess Your Spouse’s Involvement in the Business
Many small business owners blur the lines between their personal and professional lives, which can make a divorce much more complicated. In California, the business is likely community property, so whether or not the spouse also worked for the business doesn’t affect that. However, if the spouse does work for the business, that is a complicating factor.
Divorce Options San Diego—experienced professionals who provide premier San Diego divorce mediation services to couples seeking creative divorce solutions—takes a unique approach and performs a mediated business evaluation, which allows both parties to participate in the valuation of the business. This is unlike other mediators and unlike litigation, whereby the parties will hire a third-party business evaluator at much higher rates and without a mediated approach.
4. Be Prepared to Divide Other Assets
During a typical divorce, the couple’s marital assets are added up and then split down the middle. When a business is involved, splitting assets down the middle can be difficult, and you might have to make a few sacrifices. As part of a fair community property equalization process, other assets, such as retirement accounts or your family home, may be divided. While that might seem unacceptable at first, it could be the best option for protecting your business’s future.
5. Use Mediation
A mediation specialist is going to focus on bringing both parties together to come up with a mutually agreeable resolution. Through mediation, you and your spouse will have much greater control over how the assets are divided. Mediators are also there to make sure both parties feel heard, which can make this experience much less stressful. Practically every divorce is going to be painful, but treating each other with empathy could help you avoid some of the most common problems separating couples run into.
Dealing with finances during a divorce isn’t easy, especially if a business is involved. Divorce Options San Diego can handle every aspect of your divorce for you, including complicated financial matters, so you won’t need to hire expensive attorneys. As San Diego divorce mediators, we offer a one-stop-shop approach for couples who are looking for a way to dissolve their marriages amicably and with mutual respect. To learn more about our groundbreaking approach to divorce, give us a call today at (858) 281-2628.