Do I Have to Give My Spouse Part of My Business
Many business owners ask the same question when they go through a divorce in North Carolina: Will I be forced to hand over part of my business to my ex? For many of these business owners, the mere thought of having to sacrifice part of their business is extremely discomforting. After all, many business owners have worked extremely hard to start, operate, and grow their operations. Business owners often become frustrated when they find out that they may be required to liquidate or divide up their business.
This is a common concern, and an understandable one at that. Because this is such a common issue among business owners in Mecklenburg County of the surrounding areas, it should come as no surprise that there are many helpful resources available. If you want to protect your business while going through a divorce, one of the best things you can do is hire an experienced, qualified divorce attorney. These legal professionals can use a range of strategies to help you retain your business. Choose an attorney who has experience in things like high net worth divorces and high conflict divorces, and you stand a much better chance of a favorable outcome.Protections Under North Carolina Law
North Carolina law gives business owners in the state a significant degree of protection under certain circumstances. If you owned your business prior to the marriage, your former spouse likely will not take part of it away from you. This is because most assets accumulated prior to the marriage are considered “separate property.” What this means is simple: these assets cannot be divided among spouses during divorces. Generally speaking, you do not need to worry if you owned your business prior to the date of marriage. The only exception is if your spouse invested money into the business during the marriage, or there is some other comingling of the separate and marital assets.How Does Equitable Distribution Work?
If you started your business during the marriage, then the business is usually considered “marital property.” This means that your business will be subject to equitable distribution. Equitable distribution is the process in which assets are divided among spouses in North Carolina divorces. Unlike “community property” states, property is not divided in a 50/50 manner. Instead, courts take various factors into account and split property in a way that they consider to be “equitable.” Do not make the mistake of thinking that “equitable” is the same thing as “equal.”
So, how does this work when dividing businesses? Well, there are many factors that courts might consider. The first and most obvious factor is who was more involved in the business on a daily basis. If you started the business, worked long hours every day, and employed strategies that led to its growth and success, courts may be more likely to award you a greater share compared to your spouse. If both spouses formed an equal partnership and accepted equal responsibilities for running the business, courts may decide that each spouse deserves an equal share.
Keep in mind that courts consider all factors involved - even those that are not necessarily connected to your business. For example, your spouse might have been a full-time, stay-at-home parent. This might have involved tasks like buying groceries, taking your kids to soccer practice, and cleaning your house. Even though these tasks were not directly related to your business, the courts believe that they were necessary. If your former spouse did not complete these tasks, then you would have had to take time away from your business. In other words, the argument is that but for your spouse’s indirect contributions your business would not have grown and been successful. This is a perfect example of how equitable distribution works in practice.You Can Still Keep Control of Your Business
Even if you started your business during your marriage, you could potentially still keep 100% control over it. With the help of a qualified attorney, you can negotiate with your former spouse and create a divorce agreement outside of court. In this agreement, you can “swap” certain assets until both parties are satisfied. For example, you might agree to hand over 100% of the family home in exchange for receiving 100% control over your business. These types of agreements are often preferable to a court decision, as you have no way of knowing how a judge will divide your assets.Enlist the Help of a Qualified Attorney Today
If you have been searching the greater Charlotte area for a dependable divorce attorney, look no further than Arnold & Smith, PLLC. We have considerable experience with high conflict divorces, high net worth divorces, and matters pertaining to the division of businesses in divorces. Our offices are conveniently located in Charlotte, Monroe, and Mooresville. Contact us today to schedule a consultation to plan exactly how to best protect your business.