Navigating Divorce when You Co-own a Business

Navigating Divorce when You Co-own a Business

In a divorce, a judge unwinds a couple’s financial entanglements. But what happens if you own a business together with your spouse? In addition to being co-owners, you probably both contribute to the business, and it will suffer if either one of you disappears altogether. For this reason, unwinding a couple’s finances when they own a business together presents unique challenges.

Decide What to Do with the Business

Divorcing couples have options for what happens to the business. For example, you can:

  • Sell the business to a new owner.
  • Buy out your spouse’s share of the business.
  • Continue owning and running the business jointly.
  • Close the business down entirely.

If the business is profitable, closing it down is probably not the best option. However, you should take a close look at how much money the business makes. Also assess your own desire to continue working in the business. A divorce might be the right time to cut the cord to your business””along with your spouse.

How to Sell a Business

If you want to sell to a new owner, you need to value how much the business is worth. This might be tricky. Many business owners hire a valuation company, but both spouses should agree on the company hired. Valuation companies charge high fees, and you want each spouse to trust the valuation report issued. What you should avoid is each spouse obtaining their own valuation, which simply creates another disagreement.

After valuing the business, you can advertise it for sale. You might also want to jointly hire a lawyer or broker to manage the sale. Again, both spouses should agree on who to hire. Disagreements about whether to sell can actually cause buyers to flee.

Buying Out Your Spouse’s Share

You will also need to value the business so that you know how much your spouse’s share is worth. If you cannot obtain a loan to buy your spouse’s share, you should discuss giving them marital assets of equivalent value. For example, you might take the business while your spouse receives the home and other assets.

Running the Business Jointly

This option, though not ideal, is also possible if you can separate your personal issues from business ones. According to Michelle Crosby, CEO of Wevorce, you should clearly define your business roles so that there is no confusion. You should also protect yourself by drafting a buy-sell agreement in the event one ex wants out of the business at some point in the future.

Speak with a Fort Collins Divorce Lawyer Today

At Divorce Matters, we help divorcing couples divide property, including family businesses, in a way that works for everybody. Contact us today, 720-580-6745, to schedule your free consultation with one of our Lakewood divorce attorneys.

 

What is a Prenup and What Do I Include in It?

No one walks down the aisle imagining one day they will be racing to divorce court. Nevertheless, a high percentage of marriages end in divorce. Savvy couples certainly contemplate that one day their marriage might end, and they want to plan for what will happen if that day should, unfortunately, come to pass.

Prenups are Contracts

In a divorce, a court must untangle a couple’s finances, which includes dividing marital assets and debts, as well as deciding whether one spouse will pay the other alimony, called “spousal maintenance.” However, you don’t need to leave this up to the judge. Instead, before getting married, you can decide what will happen and include these agreements in your prenuptial agreement.

Prenuptial agreements also can identify what will happen in the event of death. For example, a surviving spouse is entitled to a share of the estate, regardless of what is stated in the will. This “elective share” will depend on the length of your marriage and can be 5-50% of your estate. If a spouse wants to give up their elective share, they can do so in a prenuptial agreement.

What to Avoid Including in a Prenuptial Agreement

You can’t decide everything in a prenup, no matter how well drafted it is. For example, you can’t decide child custody or child support. Colorado judges make decisions about children according to what is in the child’s best interest, and they will completely ignore any prenuptial provision that tries to decide these issues.

You also shouldn’t include any provisions that are unconscionable or against public policy. For example, you shouldn’t include a provision that penalizes a spouse for initiating a separation or divorce, which is likely void.

What to Include in Your Prenup

Most prenuptial agreements deal with the following:

  • How marital assets will be divided. Marital assets are assets you acquired while married, not assets you brought into your marriage.
  • How your marital debts will be divided. Like marital assets, these are debts you incurred while married.
  • Whether one spouse will pay alimony to the other.

To be legal, your prenuptial agreement must meet the following requirements:

  • The agreement must be in writing.
  • Both spouses must sign the agreement voluntarily.
  • Both spouses must make full disclosure of their assets and liabilities before signing the agreement.
  • Both spouses should retain their own attorneys to review the prenuptial agreement.

Additionally, make sure to sign the prenuptial agreement at an appropriate time””neither too close to the wedding nor too soon before you walk down the aisle.

Deciding Whether to Get a Prenuptial Agreement

Prenuptial agreements are not for everybody. For example, your future spouse might be opposed to signing one. Unless you want to call off the marriage, you might need to forego a prenuptial agreement and, in any event, should not pressure your spouse to sign one.

Also, consider that you can sign a “postnuptial” agreement after you get married. This postnup can include all of the information that you would include in a prenuptial agreement. The only difference is that you sign it after getting married.

Nevertheless, prenuptial agreements sometimes make sense. For example, you might be embarking on a second marriage and already have children. In the event of your death, you want all of your assets to go to your children from your first marriage. In this situation, your second spouse can waive their elective share if you die before they do.

Contact a Denver Divorce Lawyer Today

Prenuptial agreements have many wrinkles to them, and couples should carefully consider whether to sign one and what to include in it. To analyze whether a prenuptial agreement is right for you, speak with a Denver prenuptial agreement lawyer at Divorce Matters. To schedule your consultation, call 720-408-7469.

How Can Adultery Affect Your Divorce?

We expect that our spouses will remain faithful to us throughout our marriages. Unfortunately, that doesn’t always happen. Sadly, some spouses stray and are unfaithful to their partners. When these relationships cross the line and lead to sexual intercourse, it is considered adultery. Many couples are not able to overcome this challenge; here, the marriages are ruined and the next step is divorce.

Colorado is a no-fault divorce state, so you don’t need a reason to get divorced. Adultery is not considered grounds for divorce. However, in some cases, the presence of adultery in a divorce case may affect certain parts of the outcome. Ultimately, anyone who is considering divorce as a result of adultery should reach out to a skilled legal professional for immediate help.

Distribution of Assets

In some circumstances, adultery can affect asset division in a divorce. For example, the unfaithful individual may spend money to support their affair. They may pay for hotels, dinners, flowers, expensive jewelry and other gifts. Here, it’s important to note that when a couple is married, they have a duty to manage finances in a way that benefits the family;. When money that should be going toward a mortgage, food, utilities and other household expenses is going toward another individual, it becomes an issue, and is known as dissipation of assets. If a married individual has proof of these expenditures on someone else, they can use it against their spouse and seek a higher amount of assets to make up for these spending habits.

Child Custody

A mother or father is not likely to be denied custody of their children based solely on the fact that they cheated on their spouse. A person can be a poor spouse, but a wonderful parent. It’s not fair to deny children their parents’ love simply because their parents could not stay faithful. This is not a parenting issue.

Adultery can rear its ugly head in child custody situations, however. For example, if the parents cannot move on from the situation after divorce, tensions can build up and affect the children. A different parenting approach””such as parallel parenting””may need to be used to allow both parents to raise their children in a way they see fit.

Adultery may affect child custody decisions if the parent carried on the relationship in front of the children. Exposing the children to inappropriate situations during the course of the affair can negatively affect a custody agreement.

Reach Out to Our Highlands Ranch Divorce Attorneys Today

If you are divorcing because of your spouse’s adultery, you will understandably feel shocked and angry. However, your spouse’s indiscretions may not affect the outcome of your divorce.  Get help from the divorce attorneys at Divorce Matters. We can answer your questions about adultery and divorce. To schedule a consultation, contact us by calling (720) 408-7469 today.

When Should I Get Divorced?

As experienced Denver divorce attorneys, one of the most common questions we hear from clients concerns the timing of their divorce. While this will depend on the specific circumstances surrounding your case, the following are ramifications you will want to consider.

The Best Time of Year to Get a Divorce

If you experience issues in your marriage such as a spouse’s alcohol or drug use and domestic violence, you may need to act quickly to protect your family’s safety and well being. If your breakup is more about long-simmering resentments or disagreements that have caused you to grow apart, giving thought to the timing of your divorce is a smart move.

Due to Internal Revenue Service (IRS) tax laws regarding filing status, January is often considered the best time for getting a divorce:

  • If you were separated or filed for divorce on December 31st or at any prior time during the year but your divorce was not finalized, you are considered as married for the entire year and can file a joint return.
  • If your divorce was finalized on December 31 or any time prior in the year, you are considered unmarried and are required to file as a single taxpayer.

Filing status can have a significant impact on taxes you may be required to pay or refunds you may be owed and is a common reason for timing a divorce.

Other Considerations in Timing Your Divorce

In addition to tax ramifications, there are other important issues to consider in deciding when to file for divorce. Under the Colorado Dissolution of Marriage Act (C.R.S. 14-10), couples must meet residency requirements, but since Colorado is a ”˜no fault’ state, the only grounds for divorce are irreconcilable differences.

While fault grounds such as adultery, habitual drunkenness, desertion, and mental cruelty do not impact your ability to get a divorce, they can have an effect on issues such as property division, child custody, and spousal support. Remaining married to a spouse who has engaged in these types of behaviors may be viewed as condonation, meaning that you either forgive your spouse or accept their acts. Other issues to consider in timing your divorce include:

  • Impact on children: If you have small children, you may be reluctant to separate over the holiday or during their school breaks. At the same time, custody issues due to a divorce during the school year could necessitate a change in school districts.  
  • Financial preparedness: Prior to filing for divorce, it is best to be financially prepared. In addition to finding housing that is affordable on one income, you will want to have your own bank accounts and lines of credit established, make copies of important documents, and conduct a thorough inventory of all marital property and assets.  

When determining when the time is right for you to seek a divorce, it is important to speak with an experienced Colorado divorce attorney. Call or contact Divorce Matters online and request a consultation today. Serving Denver and the surrounding areas, we provide the trusted legal advice you need to protect yourself and your family.