You probably already know that one of the most contentious parts of most divorces is property settlement. But what you might not know is that the value of the business or company you own and worked so hard to build as an entrepreneur could end up being split during divorce. This could seriously affect your livelihood, career, and identity as an entrepreneur if these issues are not handled in the right way.
When Your Business Becomes Marital Property
Plenty of entrepreneurs start their businesses and build it from the ground up with their own two hands. Such commitment does not shield a company from becoming marital property and, therefore, does not stop it from becoming divided in property settlement.
In Rhode Island, your business can become marital property if it was developed during the marriage, whether or not your spouse had any role to play in it. Even if your business was established prior to the marriage, the increase in value of the business during the marriage might become marital property. Imagine that you owned a hardware store on your own before you got married. However, the store did well during the marriage and developed most of its customer base, good will and value during that time. A family court judge could determine that most of the value of the business is marital property, to be shared equally with your spouse, even though your spouse did not contribute any time or effort to the business.
Preventing an Unjustified Split of Your Business
Rhode Island uses equitable distribution rules for marital property division. As such, marital property is divided based on what is fair and equitable, not on what is equal. This is potentially helpful to you, a divorcing entrepreneur. If you can show that it would be unfair to divide your business equally with your spouse because of your greater investment of time and effort, then you may be able to protect part of the value of your business from being awarded to your spouse in property division.
You can bolster your chances of a successful outcome with real world evidence of your contributions to the success of your business. You can also improve your chances for a successful outcome by ensuring that your business is fairly valued, and that all business risks and costs are taken into account, so that the court will not award inflated values to your spouse.
Sort Out Your Divorce with McIntyre Tate LLP
Having to pay to your spouse an exorbitant share of the business that you worked so hard to build due to a bad divorce is unthinkable. Avoid turning your financial life upside down. Make certain you do all you can to protect it from an unfair property settlement by coming to McIntyre Tate LLP and our Rhode Island property settlement attorneys. With more than 150 years of total legal experience, you can be sure that our team will not be caught off-guard by any complications that could arise in your case. Our confidence and experience becomes your advantage!
Call (401) 351-7700 to get more information about our services and your options in divorce today.