There are special concerns and financial challenges for women entrepreneurs during a divorce. Whether the business is a joint venture with an ex-spouse or a sole proprietorship, it is critical that the company’s worth is revealed. In California, one must be vigilant about the value and future business earnings during a high asset divorce.
An ex-spouse may want a piece of the business as a settlement, and if that individuals and the other spouse are partners, it will be important to know what the amount of a payout will be. This, of course, depends on whether one party is interested in buying the other out. Taking inventory of the business and having an accurate value of business interests is urgent prior to any divorce negotiations. Having everything in place before beginning negotiations will ensure a fair buyout for all parties involved.
Time spent separating finances can be difficult. Trying to untangle oneself from a joint business or attempting to keep a company afloat can cause tension. To avoid taking a financial hit, it is important to know the business’ worth. An unbiased professional accountant will appraise the company’s value and scrutinize all financial records. Once the numbers are in and a divorce is filed, there is a small window of time to file a financial statement of worth and a list of all assets.
In community-property states such as California, an ex-spouse may be entitled to half of all assets that were gained during the marriage. It is important to have as much information as possible regarding ownership of the business, especially if it was originated before the marriage. The time and effort each spouse spent growing the business should also taken into consideration. In California, it may be in a person’s best interest to consult with an experienced high asset divorce attorney who will provide sound direction during negotiations.
Source: forbes.com, “How Divorcing Women Entrepreneurs Can Get What They Deserve”, Kerry Hannon, Nov. 2, 2017
