Most Colorado divorces will have their ups and downs, but when property division is a factor because there are business concerns, it can turn into an extended dispute. Since owning and building a business frequently takes a lifetime of hard work and support, it is natural that the spouse who might not have started the business will want to receive an equitable division. In some cases, it was a family business that both parties played a significant role in. No matter the situation, understanding how to handle these issues is critical and a legal firm experienced in dividing business assets can help.
Most couples will want to be fair when dividing a business in a divorce. Still, it is important to be protected. One spouse might have run the business while the other took care of the home and children. Each side will have made legitimate sacrifices to create a successful business. When divorcing, it is wise to have protections in place to serve as a shield for the worst-case scenario and ensure the situation works out reasonably.
Some couples have a contract to address the business. That could be a prenuptial agreement or a postnuptial agreement. If this step was taken, there should be limited concerns as the stipulations are listed in the event of divorce. This can serve as a guideline as to how the business assets will be divided. A contract can state that the business is separate property and cannot be divided; value that was added to the business after the marriage could be deemed marital property; and ground rules for a buyout could be in place.
For those who did not have a contract, there are still strategies to protect the business. If one spouse owns the business, that could be legally established with the organizing documents making it clear. Records as to how capital was accrued can show that one spouse was the sole proprietor and should not have to share a substantial amount of the business with the spouse. Personal and business finances can be separated to avoid confusion. If the spouse worked at the business, their role should be clearly stated and they should be paid and treated as an employee.
During a divorce when there is a family business at stake, it is common for there to be a growing contentiousness between the parties. To avoid the case becoming rancorous, costing a great deal of time and money and spiraling out of control, it is essential to have legal advice from a law firm that has a history of helping clients with their businesses and property division in a divorce.