When couples make the difficult decision to part ways, it is not just their emotions that are at stake; their financial assets also become entangled in the process. For small business owners, ensuring the protection of their entrepreneurial endeavors during a divorce is a priority.
Fortunately, there are steps you can take to safeguard your business during a divorce.
1. Understanding marital property laws
In Indiana, marital property is typically divided equitably in a divorce. This means that assets acquired during the marriage are usually subject to division, including any small businesses established during the marriage.
2. Documenting business ownership
To protect your small business, carefully document its ownership. This includes maintaining clear records of when the business was established, contributions made by each spouse and any ownership agreements.
3. Separating finances
Keeping personal and business finances separate is key to protecting your assets during a divorce and should be standard practice regardless of your marital circumstances. This means maintaining separate bank accounts, credit cards and financial records for your business.
4. Valuing the business
Determining the value of your small business is necessary for the divorce process. Seek professional assistance, such as a business appraiser, to assess the value accurately.
5. Negotiating a settlement
During divorce proceedings, you and your spouse may negotiate a settlement regarding the division of assets, including the small business. Consider factors such as each spouse’s contributions to the business and future financial needs.
6. Protecting intellectual property
If your small business involves intellectual property, such as patents or trademarks, take steps to protect these assets during divorce proceedings. Consult with legal or financial professionals to safeguard your intellectual property rights.
7. Seeking professional guidance
Navigating the complexities of divorce, especially when you own a business, can be overwhelming. Consider seeking guidance from financial advisors or attorneys with experience handling divorces involving small businesses who can provide valuable support and advice.
It is important to take proactive steps to protect your small business assets during a divorce, as safeguarding them is key to securing your financial future as you navigate this challenging time.
