Starting a business can be a great way to support yourself and possibly your entire family. Maybe you started a professional practice as a dentist, or perhaps you came up with a creative idea for a restaurant.
Your business is a source of income and likely also part of your personal identity. You may want to continue running the business for the rest of your life. Sometimes, your family will change in ways that could affect the company you run.
If you divorce in Virginia, do you have to worry about your spouse becoming the co-owner of your business?
Your business may be subject to property division rules
In Virginia, couples either need to resolve their own property division matters or litigate. If they go to court, a judge applies the state’s equitable distribution rules to their assets and debts.
Although the business may only be in your name, it may, technically, be marital property. If you started it during the marriage or used marital resources to invest in the company, then at least part of the company’s value may be part of the marital estate. Thankfully, even if your spouse can claim some of what the business is worth, they don’t have to receive an ownership interest in the company.
You don’t have to split an asset to divide its value
You will likely need to provide a current valuation for your business as part of the divorce. The financial value represented by the business is what will matter the most. A judge won’t necessarily order you to leverage the business itself or give your spouse any claim to the business or its assets.
What they will do is consider the financial value of the business when they decide how to split up the rest of your property. Your spouse could retain other ask that, like a retirement account or your vacation home, to compensate them for their share of the business has value.
Protecting yourself as a business owner going through a divorce will usually mean careful planning before you get to court. You may need to gather proof that your business is your separate property or negotiate a settlement with your spouse outside of court. Knowing the basics of Virginia property division can empower you during divorce planning.