As a business owner going through a divorce, you will face many unique challenges. A divorce can cause the lines between your personal life and your professional life to become blurred. You need to protect your personal and business finances but first, you must determine if your business is considered separate or marital property. Sometimes, making this determination is not always easy.
When is a Business Considered Separate Property?
Even if you operate a business and consider it yours, the law may not view it the same way. Only marital property, which includes assets and liabilities acquired by the couple during the marriage, is divided during divorce. Separate property, or that which was acquired before the marriage, is excluded from divorce proceedings. Businesses are considered separate property in many different circumstances, which include:
- You inherited the business: Inheritances are usually considered separate property during divorce proceedings.
- You were gifted the business: Like inheritances, gifts are also typically considered separate property during divorce.
- You started the business before you were married: Again, any assets obtained before the marriage are considered separate and therefore, not divided during divorce.
- You use separate assets to purchase the business: If you used separate assets, such as an inheritance, to purchase the business, it can be considered separate property, even if you purchased it during the marriage.
- Your prenuptial or postnuptial agreement specifies the business is separate property: If you own a business prior to the marriage, it is important to draft a prenuptial agreement that stipulates the business will remain separate property. If you start a business during the marriage, a postnuptial agreement can also provide the same protection.
When is a Business Considered Marital Property?
Even when a business is considered separate property, there are times when the courts may still determine that it is marital property. For example, if you used marital funds to start the business, the courts may decide the company is marital property, even if you were the one who ran and maintained the business while married.
Additionally, if you commingled business and personal funds, the business could also be considered marital property. For example, if you used profits from the business to pay some of the household expenses, commingling funds this way can mean the business is classified as marital property and therefore, subject to property division.
Determining whether a business is considered separate or marital property is a complex process. A Columbus family lawyer can examine the facts of your case and advise on how to best protect your business.
Call Our Business Owner Divorce Lawyers in Columbus Today
If you are a business owner going through a divorce, your case could potentially become very complex. At Lawrence Law Office, our Ohio business owner divorce lawyers have the necessary experience to protect what is yours and will help you obtain the best settlement possible. Contact us now at (614) 363-0752 or fill out our online form to schedule a consultation and to learn more about how we can help.