Dedicated Family Law Attorneys
Indiana Business Owner Divorce Attorneys
Divorce is never easy. You have a lot to lose—your family, your children, your hard-earned assets, and even your business. For business owners in a divorce, the stakes are even higher. To best protect your future and that of your business, be sure to consult a business owner divorce attorney early, and, where possible—well before you address divorce with your spouse.
The Indiana divorce attorneys at Keffer Hirschauer LLP know how to protect your business in a divorce. Between their keen litigation skills and legal and business acumen, they can help you prepare for divorce in a way that best shields your business and your future.
Contact us today to get started on your case with a free consultation.
When to Consult Business Owner Divorce Attorneys? Now.
As a business owner, you may have a lot of people relying on you. Co-owners, employees, suppliers, and customers may all depend on you. Divorce for business owners can threaten not just your investment and livelihood but the livelihoods and business interests of many others. To protect that investment and its effect on others, take steps early—before you begin talking about divorce with your spouse—by consulting an Indianapolis divorce attorney at Keffer Hirschauer LLP.
If your business is your primary source of income, it’s likely to be your largest investment as well. You need experienced guidance from Indiana business owner divorce attorneys to make sure it survives your divorce with your interest intact.
If you are facing a divorce, CLICK HERE to download our FREE divorce eBook to prepare yourself for the divorce process!
The First Question in a Business Owner Divorce: Is My Business a Marital Asset?
Understanding the Indiana divorce law basics is the first step to protect your business in a divorce. Indiana Code § 31-15-7-4 defines marital property to include property:
- Owned by either spouse before the marriage
- Acquired by either spouse after the marriage and before separation
- Acquired by the spouses together
In other words, all marital assets initially go into the “marital pot.” Indiana Code § 31-15-7-5 provides that the court should presume that an equal division of the marital pot is equitable, but the parties may show that an unequal division is equitable by offering evidence on any of these factors:
- Each spouse’s income-producing and non-income-producing contributions to the marriage
- The extent to which a spouse owned an asset before the marriage or acquired it from gift or inheritance
- The economic circumstances of each spouse when the property division will become effective, including consideration of awarding the marital residence to the spouse with custody of any children
- Each spouse’s conduct during the marriage relating to the disposition or dissipation of property
- Each spouse’s earning ability as related to the final property division and determination of property rights in the divorce
An experienced Indiana divorce attorney can successfully argue to the court reasons that an asset should be taken out of the marital pot subject to division or set aside to one spouse without an equal offset to the other spouse. Some of the reasons a court might agree include:
- The individual spouse owned the asset before the marriage and it remained an individual asset throughout the marriage
- The individual spouse acquired the asset during the marriage and it remained separate from and not used for marital purposes
- The individual spouse acquired and maintained an asset before or during the marriage strictly with non-marital funds
The business owner divorce attorneys at Keffer Hirschauer LLP have deep experience arguing the exclusion of certain assets from the marital pot subject to division in Indiana.
Divorce for Business Owners
Divorcing spouses often struggle to separate the divorce proceedings from the rest of their lives. In divorce for business owners, there is an extra challenge: protecting the business. Given that everything owned by either spouse is initially included in the marital pot subject to division, the business owner spouse needs to work with an experienced Indiana divorce attorney who is also adept at fighting to protect such a dynamic and significant asset.
Unlike real estate, financial accounts, or personal property like a car, a business interest is a going concern, likely providing income and often jobs for others. In a worst-case scenario, a business could be awarded to your spouse in the divorce, leaving you without that income stream. Ownership vested in one spouse might not interfere with business operations, but dividing the business could negatively impact the business permanently.
To protect your business in a divorce, as well as your income, co-owners, and employees, consult an Indiana divorce attorney who is both an accomplished litigator and experienced in complex family law divorces with business assets. Scheduling an early consultation can help you protect your hard-earned commercial assets, before ever filing for divorce.
Protecting Your Business Before Divorce is on the Horizon
No one enters into a marriage—or a business—expecting it to fail, but careful planning can soften the impact if things collapse. Marriage planning and business planning are intertwined in this way. The Indianapolis business owner divorce attorneys at Keffer Hirschauer LLP can help you develop strategies to protect yourself and your business.
Protecting your business in a divorce starts as early as business formation. Your choice of the business’s legal structure affects how it is operated, how its income is taxed, and whether it is reachable by creditors and others—including a spouse in a divorce. The business legal structures available in Indiana include:
- DBA (doing business as)
- Limited Partnership (LP)
- Limited Liability Partnership (LLP)
- Corporation or Professional Corporation (PC)
- Limited Liability Company (LLC)
The DBA affords the least protection. Without any formal legal structure, the business has no protection from creditors of either spouse and is much more likely to remain in the marital pot subject to distribution than one of the other legal structures. This example illustrates why and how protecting the business begins before the business starts operating, through the choice of legal structure.
Other Ways to Protect Your Business in a Divorce
You can also protect your business in a divorce by methods outside of the business formation. As a business owner, your sound business plan should include strategies to protect it from outside claims. Divorce is just one example of such a claim. One strategy is to settle disputes before they happen via a contract. Examples include prenuptial and postnuptial agreements and buy-sell agreements.
Prenuptial and postnuptial agreements are contracts between spouses resolving in advance claims that can arise in a divorce. The main difference between the two is timing—spouses execute a prenuptial agreement before the marriage and a postnuptial agreement after the marriage.
Prenuptial and postnuptial agreements can limit or exclude the one spouse’s right to claim any ownership in a business in the event of a divorce. Spouses are not always as agreeable in the event of a divorce, and the spouse foregoing an interest in the business may contest the validity of a prenuptial or postnuptial agreement. For that reason, you need experienced Indiana divorce attorneys to negotiate, draft, and defend your prenuptial or postnuptial agreement.
A buy-sell agreement is similar to a prenuptial or postnuptial agreement in that it defines how an owner will be compensated for relinquishing his or her interest in the business. Used for either partnerships or corporations, a buy-sell agreement can be useful when both spouses have an ownership interest in the business. In the event of a divorce, spouses often prefer not to continue to work together.
A buy-sell agreement can define the terms of one spouse’s exit from the business and compensation for his or her interest well before the emotional strain of a divorce affects such negotiations. As with prenuptial and postnuptial agreements, your buy-sell agreement should be negotiated, drafted, and later defended by a skilled divorce attorney.
Divorce and Business Valuation
Preparing for divorce means preparing for a variety of court decisions. If the court includes your business in the marital pot subject to division despite your protective measures, and no prior enforceable agreement removes the business from the marital pot, you need an experienced Indiana family law litigator to fight for your claim to the business and its accurate valuation.
Including the business in the marital pot means the court will need to determine the value of the business, usually through a professional business valuation. The parties to the divorce can agree on a professional valuator, they can each get their own valuator, the court can name a valuator, or any combination of these. If the court must consider more than one valuation, having a well-rounded Indiana divorce attorney is critical to obtaining the valuation you propose.
Once the court has determined the value of the business and the other marital assets and debts, it must determine how to allocate them between the parties. With regard to a business interest, an Indiana divorce court considers factors such as these:
- Whether both spouses work in the business
- Whether the business is owned with one or more others outside the marriage
- The input and impact of either spouse on the business’s past and potential future success
- Whether there are other assets available to balance allocating the business to just one spouse
Depending on the circumstances, the court may award the business to one spouse or order the spouses to share the business interest. If you are intent on being the sole owner of your business interest after the divorce, you should be prepared to forego an interest in other marital assets.
The experienced Indianapolis business owner divorce attorneys at Keffer Hirschauer LLP will apply their litigation experience in family law matters to fight for you.
Keffer Hirschauer LLP: Where to Go for Business Owner Divorce Advice
If you’re an Indiana business owner facing divorce, you need immediate counsel from Indianapolis business owner divorce attorneys who understand the dire need for divorce strategies to keep your business intact and in your hands.
At Keffer Hirschauer LLP, every Indiana family law litigator on our team is ready to fight for your right to keep your business and, as much as possible, exclude it from the marital pot subject to division. Whether you have a prenuptial, postnuptial, or buy-sell agreement, own the business with your spouse or others, or operate a sole proprietorship, we can help.
For a free consultation with a business owner divorce attorney in Indianapolis, call (317) 857-0160 or complete our online contact form.