Entrepreneurs in the state of Wisconsin should be aware of the potential ramifications to their business before they divorce. Many entrepreneurs forget that their business is generally considered a marital asset and therefore is subject to consideration when assigning valuation to the estate, leading to unpleasant surprises in court when matters such as spousal maintenance, child support and other expenses are determined. By understanding how divorce may influence their business, entrepreneurs can better protect themselves.
During a divorce, all the assets of both partners are generally considered. This includes the business interests of both parties. For example, terminating a former spouse who still works for the business may lead to a further lawsuit for wrongful dismissal. Likewise, an entrepreneur must declare the business’s full value at the outset, because if the court discovers hidden assets later, the court is more likely to react negatively to the spouse who attempted to conceal them.
However, if the business was established before the marriage, the business may be considered non-marital property and therefore given less weight or not considered at all in the divorce. How the business is structured, when it was established and how much contribution the spouse made are all factors that may influence how the business is considered in divorce proceedings.
During a divorce, an attorney may start with establishing the valuation of the marital estate, including all assets and debts the couple shared. Once this has been done, the attorney, spouses and other counsel may work to craft a property division agreement that is fair and equitable to all parties. The attorney might then present the agreement to the judge, who may accept or reject the agreement depending upon other relevant factors in the case.
