What Business Owners Need To Know When Considering Divorce in VA
Property division is often one of the most challenging aspects of divorce proceedings, especially if you and/or your spouse own a business. What will happen to your business during a divorce, and how can you protect your hard-earned company? Learn what business owners need to know when considering divorce in VA.
Does Your Business Count as Marital or Separate Property?
The division of your business assets during a divorce depends on whether Virginia law views your business as one of your marital assets or as separate property:
- Your business is marital property if you co-own or run it with your spouse or if you started your business or cover business expenses using marital funds.
- Your business may count as separate property if you started it before your marriage, ran it independently from your spouse, kept it in your name only, and never sponsored your business with money from your marital account. A valid prenuptial agreement may also define your business as separate property.
In some cases, even if it looks like your business is a non-marital asset, your spouse may have some interest in the business’s value. This will depend on the length of your marriage, your spouse’s indirect contributions (like raising children or running a household), and other factors.
Possible Solutions for Your Business in Divorce
Depending on your circumstances, you and your spouse may consider different solutions for your business during a divorce. For instance, you may choose to:
- Buy out your spouse’s interest in the business
- Sell the business and split the proceeds
- Keep the business in exchange for other assets, like the family home
Mediation can help you and your spouse reach an amicable solution that suits both sides, reduces conflict over property, and protects the business you worked so hard to build.
Business Asset Valuation in Virginia Divorces
To ensure equitable property division in divorce, the court will require a reliable valuation of your business. You will usually need to work with a valuation expert who may need to testify in court. Keep in mind that your spouse may disagree with your valuation and hire a different expert. Here, too, mediation can help you reach an agreement and simplify property division.
The following methods may apply to business valuation for divorce purposes:
- Asset valuation for businesses that focus on physical assets, like retail stores
- Market valuation — i.e., your business’s straight marketplace value
- Income-excess earning, which is the estimated difference between your income as a business owner and the salary you might have earned as an employee in the same capacity
DiPietro Law Group: Flexible Family Law Solutions for Business Owners in Virginia
A skilled divorce lawyer can protect your finances and peace of mind as you navigate divorce proceedings. Our legal team can explain what business owners need to know when considering divorce in VA, find creative solutions for dividing business assets, and help ensure your business runs smoothly during and after a divorce.
Call (888) 530-4374 or contact us online for a consultation with a divorce lawyer in Fairfax, VA.