Maybe you took over your family business and have run it for several years. Perhaps you and your spouse bought a franchise together. Maybe they started a professional practice after they finished their accounting degree.
If business ownership has played a part in your marriage, it will inevitably affect your divorce. The business one spouse owns could represent a significant amount of the marital estate or the sole source of income for that spouse. How do you figure out who keeps the business when you divorce in Ohio?
Some people who get married while owning a business will sign a prenuptial agreement to protect their interests in the company. Others who start a business while already married may decide that it is in their best interest to sign a postnuptial agreement with their spouse.
Such contracts often help to establish the business as separate property. Being separate property will prevent one spouse from claiming it in a divorce while also potentially protecting them from any liabilities caused by the business during the marriage.
If you don’t have a marital agreement outlining what to do with the company or clarifying who owns it in the event of a divorce, the next step will be to determine if you have to share the business with your spouse.
Under Ohio’s equitable distribution rules, a judge will only have the authority to split up your marital or shared property in a fair matter if you can’t decide on a settlement outside of court. Judges can’t split separate property, so you need to determine if your company is marital property or not.
If one spouse owned the business before the marriage or if they inherited it, it might be separate property. If they started it during the marriage or used income earned while married to fund the company, it may be at least partially marital property.
Just because a business might be marital property doesn’t mean you have to actually share ownership of it. It only means that the value of the business could affect your property division outcome. You can still negotiate for terms that include one spouse retaining sole ownership of the company after the divorce.
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Contact us today to schedule a Initial Consultation with our Toledo, Ohio, attorneys.