Going through a divorce is always going to be complicated, but you might run into a few additional problems if you own a small business. In addition to protecting your business’s assets, you also need to make sure the separation isn’t going to impact your day-to-day operations. Try these five tips that will help you get through your upcoming divorce without damaging your business.
1. Start the Conversation Early
While it might seem easier to hand your spouse the divorce papers and walk away, it’s always preferable to avoid a lengthy legal battle. If your marriage is coming to an end, you need to sit down with your spouse and have a serious conversation. You need to be as honest as possible during that conversation, and even though strong emotions will be involved, you need to address the practical issues concerning your business in a calm and mutually respectful way. Starting this process off right could help you avoid quite a few issues down the road. Pull together your financials, current budgets, house expenses, and paperwork from the business, along with tax returns.
2. Take a Fresh Look at Your Prenuptial Agreement if You Have One
As soon as you’re sure your marriage is going to end, you need to revisit your prenuptial agreement, if you have one. In addition to covering your personal assets, your prenup might also protect your business. Taking a fresh look at this agreement will give you a much better idea of what to expect in the coming months. Those documents usually cover marital property, personal assets, business assets, childcare, debts, and investments.
If you don’t have a prenuptial agreement, see if you and your spouse can come to an agreement on your own about all the above issues. Emotions may be running high, so this may be difficult. If you can’t agree but you still don’t want the expense and turmoil of hiring attorneys and going to court, seek out the advice of an experienced divorce mediator, who can help you come to a mutually satisfactory agreement.
3. Assess Your Spouse’s Involvement in the Business
Many small business owners blur the lines between their personal and professional lives, which can make a divorce much more complicated. In California, the business is likely community property, so whether or not the spouse also worked for the business doesn’t affect that. However, if the spouse does work for the business, that is a complicating factor.
Divorce Options San Diego—experienced professionals who provide premier San Diego divorce mediation services to couples seeking creative divorce solutions—takes a unique approach and performs a mediated business evaluation, which allows both parties to participate in the valuation of the business. This is unlike other mediators and unlike litigation, whereby the parties will hire a third-party business evaluator at much higher rates and without a mediated approach.
4. Be Prepared to Divide Other Assets
During a typical divorce, the couple’s marital assets are added up and then split down the middle. When a business is involved, splitting assets down the middle can be difficult, and you might have to make a few sacrifices. As part of a fair community property equalization process, other assets, such as retirement accounts or your family home, may be divided. While that might seem unacceptable at first, it could be the best option for protecting your business’s future.
5. Use Mediation
A mediation specialist is going to focus on bringing both parties together to come up with a mutually agreeable resolution. Through mediation, you and your spouse will have much greater control over how the assets are divided. Mediators are also there to make sure both parties feel heard, which can make this experience much less stressful. Practically every divorce is going to be painful, but treating each other with empathy could help you avoid some of the most common problems separating couples run into.
Dealing with finances during a divorce isn’t easy, especially if a business is involved. Divorce Options San Diego can handle every aspect of your divorce for you, including complicated financial matters, so you won’t need to hire expensive attorneys. As San Diego divorce mediators, we offer a one-stop-shop approach for couples who are looking for a way to dissolve their marriages amicably and with mutual respect. To learn more about our groundbreaking approach to divorce, give us a call today at (858) 281-2628.
If you’re heading toward a divorce, you’ll need to quickly get ready to protect yourself and focus on getting your finances in order. Every divorce is an emotionally draining experience, but you need to keep your eye on the bigger picture. By taking precautions, you’ll be in good shape whenever difficult asset distribution issues arise. Here are some steps you can take to protect yourself financially in a divorce.
The first thing to consider is whether you want to go the traditional route—hiring an attorney, spending a lot of money on legal fees, having to go to court numerous times, and getting caught up in an atmosphere of conflict that often escalates—or try a much less expensive, more respectful, resolution-centered method that eliminates all those negative aspects of traditional divorce. The San Diego divorce mediators from Divorce Options San Diego will work with you and your spouse to create a mutually satisfactory agreement that protects the interests of the entire family and leaves couples feeling ready to move on to the next stages of their lives. If you still want to take the conventional route through the courts, the following tips can help.
Locate and Describe All of Your Assets
By identifying and organizing your assets, you’ll become knowledgeable about the value of your assets and where you can gain access to them, which will allow you to sort through what counts as your separate property and your spouse’s, such as real property, bank accounts, retirement and investment accounts, and other assets. You can then put together a meaningful financial statement that will clarify how best to handle things in your divorce and beyond its completion or finalization.
Keep Everything in Writing
When you have written evidence, you’ll be better able to prove what’s yours and be able to protect it against any claims by your spouse. Make paper copies of account statements and tax forms, and print everything out. An electronic version may not be enough to keep your spouse from freezing you out of your joint accounts.
Have Cash at the Ready
You don’t want to get caught without enough money to pay for things on your own. However, be careful to not take too much out of any joint accounts, as this could get you into some serious trouble with the courts.
Get Familiar with Your State’s Laws
You should get to know your state’s community property laws to be able to intelligently make the right decisions. Do some research online, or use an attorney specializing in divorce law of your state.
Organize Your Thoughts
You’ll need to be able to decide what you want as well as what you need during the divorce process and thereafter. Often spouses will try to agree on a settlement of their assets, but they can’t really do so without the benefit of some clear thinking and planning. You’ll want to make decisions you can live with for the rest of your life. Take a hard look at your finances. Determine how much you’ll need to maintain the right standard of living for you and your kids, if any.
San Diego divorce mediation can protect your interests just as well, if not better, than the contentious attorney-centered divorce process. Divorce mediation is much less expensive than using attorneys, and instead of framing divorce as a win-lose situation, divorce mediation focuses on producing sustainable mutually beneficial outcomes for you, your spouse, and your children. At Divorce Options San Diego, we work with both spouses, thoroughly analyzing your financial, legal, psychological, and social circumstances to develop mutually beneficial resolutions and transition plans that allow you to start the next phase of your lives with a sense of satisfaction and optimism. Call us today at (858) 281-2628 to find out how you can avoid the stress, high costs, and heartache of going through a divorce the traditional way.
You definitely want to be careful with planning your finances for the divorce process. Mistakes made in this area could prove to be rather costly. There’s no question that divorce is a very difficult process, both emotionally and financially. Sorting out assets and liabilities is often a messy affair, and you’ll need to get your finances straightened out to prepare for the long road ahead. The experts from Divorce Options San Diego—experienced professionals who provide premier San Diego divorce mediation services to couples seeking creative divorce solutions—offer this checklist for planning your finances in a divorce and avoiding some common mistakes.
Take “Free” Advice with a Grain of Salt
Be careful with the advice you get from friends, family, or the Internet. Divorce law varies from state to state, so if you’re looking to make any financial decisions before a divorce, it’s best to confer with an attorney licensed in your state.
Seek Help from Other Professionals
Besides an attorney, a financial expert such as a certified divorce financial analyst (CDFA) can provide you with expert advice with respect to your present and future financial situation. CDFAs are more commonplace these days, since they can help you determine whether a divorce is financially viable, whether your situation warrants a divorce settlement, and, if so, the optimal way to structure it. An accountant is another reliable resource for your financial decisions.
Get Organized with Your Financial Documentation
Gather your financial records together and keep them organized in chronological order. These documents tell the story of your marriage’s finances. While this task is exhausting and may feel endless, the sooner you get started on it, the better off you’ll be in the long run. Some of the most important documents are statements from your checking and savings accounts, credit card accounts, investment and retirement accounts, loan ledgers for all loans (e.g., mortgage, vehicle, personal, etc.), current pay stubs, income tax returns for the past three years, and a list of your assets and debts before marriage and those you acquired after marriage.
Track Your Expenses
By keeping track of your household expenses, you’ll be better able to create a budget and build your case for the inevitable division of your assets and debts. Completing this task will also assist you in regard to spousal or child support issues. You’ll want to maintain a record of past months and years for all household bills, such as food, clothing, home maintenance, vacations, transportation, entertainment, and any other expenses you’ve paid, as this will provide you with information to be able to intelligently project your future expenses.
Don’t Make Any Large Financial Adjustments
The court will determine your financial situation and make any necessary changes. As your finances will get sorted out in the divorce proceedings, it behooves you to wait accordingly. Don’t be tempted to make any changes without the court’s permission, as you may do more harm than good and possibly get charged with criminal contempt. Consult with your attorney about any particular move you may be contemplating.
Conserve Spending and Saving
Separating marital finances is tricky, so the less you spend and save, the easier it will be for the court to divide your and your spouse’s assets and liabilities. Maintaining financial transparency will also allow you and your spouse to live comfortably and amicably throughout the divorce proceedings.
Dealing with finances during a divorce isn’t easy, especially if attorneys are major actors in the proceedings. If you want an alternative to hiring lawyers and going through a drawn-out, acrimonious process, turn to Divorce Options San Diego. As San Diego divorce mediators, we offer a one-stop shop approach for couples who are looking for a way to dissolve their marriages amicably and with mutual respect. We can handle every aspect of your divorce for you, so there won’t be a need to hire expensive attorneys. To learn more about our revolutionary approach to divorce, give us a call today at (858) 281-2628.