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Don’t Make This Huge Mistake When Divorcing Your Business Partner

When your partner in life is your partner in business, divorce tends to throw a wrench in your operations. And given that more than 80 percent of businesses in the United States are family owned, divorce’s effects on family businesses can be fairly substantial.

The Biggest Mistake Divorcing Business Partners Make

Unsurprisingly, the biggest mistake you can make when divorcing your business partner is doing it yourself. The forms necessary for divorce are available online, so in some circumstances, amicable divorcing couples who share a business will try to divorce by themselves.

This is a huge mistake. First of all, it can lead to a hit on your taxes thanks to retirement account changes. If you and your spouse attempt to split your 401ks or IRAs by yourself, you may inadvertently trigger a tax penalty.

Besides the monetary aspect, why should divorcing business owners speak with an attorney? It’s simple. Divorce is complicated, and when a business is involved, the complications get more complex. Business valuation in divorce is different than other types of valuations, because there may be applicable discounts for lack of transferability, lack of marketability and more. The last thing you want is to overvalue the business and then be responsible for a cash payment to your spouse based on an artificially-inflated number.

Not only that, but by having dedicated attorneys, you can keep emotion out of the mix. DIY divorce does not offer that kind of emotional distance that can help you maintain a more businesslike approach to the division of your company. With all of the effort that you have put into growing your business, you do not want to leave anything up to chance. You can do-it-yourself ”“ but don’t be surprised if it does not end well.

Our Denver divorce lawyers can help you navigate the complicated legalities regarding business division and valuation in divorce.