It can be difficult to determine what will happen to your business when you get a divorce. If you have a prenuptial agreement, and the business was already in existence when you signed it, you may have specified that the business should be considered separate property and stated what would happen to the business if you ever got divorced.
However, if you do not have a prenup in place, or your business was not addressed in the prenup for whatever reason, determining what will happen to your business in the divorce may be a little more complicated. While you may think that your business solely belongs to you, the Virginia family law court that handles your divorce may see it differently.
Separate versus marital property
Before deciding as to what happens with the business, the court will first look at whether the business should be considered separate or marital property, as only marital property may be divided between spouses in states with equitable distribution laws (e.g., Virginia).
Keep in mind that just because you started the business before the marriage, does not mean the court will consider it separate property. If the answer to any of the following questions is ‘yes,’ the court may consider your business marital property:
- Was the business started after the marriage began?
- If the business was started before you got married, did your spouse financially contribute to the business?
- Did your spouse work for the business?
- Did you use marital funds to cover business-related expenses?
- Did you forgo a salary?
Many people spend their whole lives building a business, only to have to sell it and split the proceeds with their ex in the divorce. If you are concerned about what will happen to your business in the divorce, consider speaking to an attorney specializing in divorce and family law matters.