Business owners may have special concerns during divorce

June 3, 2019

Business owners in Colorado who decide to divorce may have specific concerns that arise about their situation. After all, some of the longest-lasting effects of divorce are financial, and these issues may linger long after the emotional and practical issues have faded away. In particular, business owners may want to think about the tax implications as well as the impact on their companies of any decisions they make about property division in a divorce. However, business owners can work with professionals and take steps to allow their companies to emerge successfully after a divorce.With many family-owned businesses, these enterprises may be the major source of income as well as a significant marital asset. This means that the business may be the primary subject of negotiations over how to handle property division in the divorce. This is especially true for the type of small companies where personal and corporate lines are often heavily blurred in terms of finances. As a result, it may be difficult to agree on a valuation for the business or an accurate assessment of the business owner’s income.Since Colorado is an equitable distribution state, it is not assumed that each spouse will necessarily receive 50% of the business during a divorce. However, when the business is a major contributor to household income, and both spouses are part of its success, it should be considered likely that some division will be a part of the divorce settlement. In some cases, other marital property, such as investment funds or retirement plans, can be used to “buy out” the other spouse.The complications that accompany the financial side of divorce can be exacerbated when a family business is involved. A family law attorney can work with a divorcing spouse to advocate for a fair settlement on property division and spousal support.