Table of Contents

• Equitable And Equal Distribution Of Assets
• The Timing Of The Business Start-Up
• Marital Contributions
• What If Both Spouses Want To Stay Involved?
• Consider A Buyout
• Can A Spouse Actually Take Half My Business?
• Get Legal Support Needed For Your Joint Business

Many couples start a joint business together during their marriage, but if the marriage fails or divorce becomes necessary, your business could suffer. Forming a business during your marriage could mean it is considered a marital asset, which will need to be split equitably between partners. Ex-spouses may want to take the whole business or may not want to work with their ex-spouse any longer. Protecting a business during and after divorce can be a complicated process, so let’s dive a little deeper into how you can keep the business or the best way to dissolve it and benefit both parties.

Equitable And Equal Distribution Of Assets

In Utah, marital assets will be split equitably, not straight down the middle. Equitable splits will look at current financial status, child custody, and pre-marital assets. This means that your business could be in trouble if your lawyers or the court decide that you must share business assets with your partner. They could also rule in favor of your ex-spouse, allowing them to take over the business and leaving you with nothing. Many factors can contribute to this, so keeping detailed reports or having a pre-nuptial or post-nuptial agreement can protect you in the case of a future divorce. 

The Timing Of The Business Start-Up

When the business was started will also play a role in how it is divided or dissolved during a divorce. If your joint business was started during your marriage, it will be seen as a marital asset. If the business was yours before marriage and your partner was brought on as a partner after your marriage, it could be considered a pre-marital asset. If you and your spouse can’t agree about how to divide or handle the business, the court will look at these kinds of factors to help decide for you. 

Marital Contributions

Partners who contributed monetarily or with their time could be compensated during a divorce. Spouses who contributed the most to the business may be favored when dividing your assets during divorce. Keeping track of hours worked (paid and unpaid), materials they contributed, and their current ongoing payments can help prove the facts to your attorneys and the divorce court. Indirect contributions like staying home to raise children while a spouse focuses on building the business also count as marital contributions. 

What If Both Spouses Want To Stay Involved?

If you both want to work together and are willing to keep your business a joint venture after a divorce, you have the option to do so. However, this requires good communication and a good relationship with your soon-to-be ex-spouse. Working with a spouse can be difficult, but working with an ex-spouse can be extremely difficult. If both of you want to provide for the business and are willing to put in the work, you may not need to split the business. This is not always the best option for divorced couples, especially as emotions run high. 

Consider A Buyout

The most common solution for a joint business that was started during your marriage is for one partner to buy out the other. Instead of selling the business or closing it altogether, one partner who has the financial means can buy out the ex-spouse so that the business is completely in their name. Buyouts can be done in spread-out payments, a lump sum, or trading other marital assets of equivalent value.

Can A Spouse Actually Take Half My Business?

This is a question that is difficult to answer because it varies from person to person. If your business has separate and marital contributions, the courts will consider other alternatives besides splitting the business down the middle. The current value of the business and how much it grew during your marriage could tip the scales one way or another, so the best way to avoid your spouse from taking half of your business is to come up with a solution that they also benefit from.

Get Legal Support Needed For Your Joint Business

Navigating a divorce is a challenging and stressful process, so it is important to work with a legal expert if you want to have a smooth process. KNK Law is here to help you through this process, present you with your options, and help negotiate with your soon-to-be ex-spouse. Our lawyers have been working on legal cases for many years, so you will have confidence when working with our team. Reach out to us or visit our Ogden office to handle your upcoming divorce with ease.