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Family law: Dividing business assets in divorce

Division of assets in a divorce can be a challenging process for business owners. In preparation, it would likely be wise to learn and understand the state laws relating to the definitions of separate property, the validity of marriage agreements and other aspects of Ohio family law that might come into play. To lessen the divorce's impact on the business, the owner can start by gathering all the business records such as agreements, financial statements and accounting records along with a current valuation.

If the company was established prior to the marriage, a portion of it might qualify as separate property, and documented proof will be necessary.  The business value before and during the marriage along with the cash flow and assets before and after the wedding will have to be established. The court will also consider the involvement of each spouse and how much each one invested in the business.

With all the information at hand, it will become time to divide business assets. Arranging to pay the other spouse in installments may have the least impact on the business. If the other party agrees, a contract to this effect can be drafted. There are other options, and a spouse who wants to retain the entire business of which the other party is entitled to a portion can forfeit other assets in exchange.

However, these are all decisions that could play significant roles in post-divorce financial stability and are best made with the guidance of an experienced family law attorney. A lawyer will likely have other resources such as financial and tax advisors that can explain the potential consequences of various options. With appropriate guidance, an Ohio business owner may be able to make informed decisions about property division when his or her marriage comes to an end.

Source: investopedia.com, "4 Ways to Reduce the Impact of Divorce on a Small Business", Shawn Leamon, Accessed on Aug. 4, 2017

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