Business owners have many unique concerns when it comes to divorce in Kansas City. If you are planning to divorce in the Kansas City, MO area in the near future, you should understand how state law views business assets in divorce as they apply to your unique situation. Depending on the nature of your business, the length of your marriage, and your spouse’s contributions to your professional success, various aspects of your business and/or career could be subject to scrutiny in divorce proceedings.
An experienced Kansas City, MO divorce attorney can explain the property division process for your divorce and what role your business properties and assets will have in these proceedings. If you built your business on your own prior to a short marriage, your attorney could help to ensure you retain proper ownership and control over your business assets. If you contributed to a business that you and your spouse built together or made personal sacrifices to help your spouse advance their professional career or manage their business, explain this to a lawyer. An attorney can ensure you receive fair compensation for your ownership.
Dividing a Jointly Owned Business in Divorce
When a married couple starts and runs a business together, they must address this joint ownership should they ever decide to divorce. In very rare cases, it may be possible for a divorcing couple to continue their business relationship following the end of their marriage, but this is not realistic for many married business owners. In most cases, a joint-owned business must be divided equally in a divorce.
There are generally two options for legally dividing a business in a divorce. Either the couple must sell the business and split the proceeds or one must “buy out” the other’s share of the business to assume sole ownership of the business. Depending on the nature of the divorce, it may be possible for one spouse to trade certain assets or properties to match the business’s value and assume ownership.
Determining Business Appreciation
It is not uncommon for one spouse to have a business they started and ran well before marrying. If the couple divorces, it is possible for their spouse to have a valid claim on the business if their efforts during the marriage allowed the business to grow and appreciate. For example, suppose a divorcing spouse owns a business that was valued at $200,000 at the beginning of the marriage. During the course of five years of marriage and thanks to their spouse’s support, the business appreciates to $1,000,000 in value.
In this example, the spouse would have a valid claim on the $800,000 increase in value if they provided childcare, household services, financial support, and/or acted as an employee of the business during that time. If they made a capital contribution toward starting the business or purchasing equipment and/or materials needed for growth, this would also contribute to the business’s appreciation and entitle the spouse to ownership rights in divorce.
Contributions Toward Professional Development
Sometimes, your professional career can come into play during divorce, even if you do not own a business. If you completed any type of post-secondary education, certification program, or other professional training to which your spouse contributed, this would qualify your spouse to have ownership rights over the professional success you enjoyed thanks to their support.
The Kansas City, MO court will view a marriage as a team with two equal stakeholders. In divorce, each divorcing spouse has an equal claim over the marital property obtained during their marriage. Even if you did not financially contribute to your marriage, the household services and support you provided matters. Those efforts supported the marriage and would more than qualify you to claim joint ownership over your spouse’s professional earnings, such as a private practice, privately owned business, or lucrative position secured with your help.
What to Expect from Divorce Involving a Small Business
If you own a small business in the Kansas City, MO area, it’s only natural to want to do everything you can to protect it from your impending divorce proceedings. The first step in determining your options is to think realistically about you and your spouse’s contributions toward the business. Ask yourself several questions about your business and review these points with an experienced Kansas City, MO divorce attorney:
- When did you start your business? Were you already married, or did you start the business before marrying?
- What contributions did your spouse make toward your business? Did they contribute seed funding, household support, or any other services that made starting and running your business easier for you?
- Did your spouse help you advance your professional career? If they supported you through law school, medical school, or an advanced certification program, they share a stake in your current professional success.
- How did your business’s value fluctuate during your marriage? Did your spouse help with the business. If so, did their efforts improve or negatively impact the business?
These are just some of the essential questions you must ask and thoroughly explore to have an accurate idea of what to expect in your divorce proceedings as far as your business and property division are concerned. These questions should help you narrow down your spouse’s potential claim of ownership over your business or professional income. Your attorney can provide professional insights into the unique aspects of your divorce case.
Choose the Right Legal Representation
If you plan to divorce in the Kansas City, MO area as a business owner, hire legal representation who understands the unique challenges facing business owners divorcing under Missouri state law. Whether you intend to sell your business or fight for sole ownership, the right attorney can help you build a strong case and navigate the legal and commercial red tape you will need to handle through your divorce proceedings.
Choose a Kansas City, MO divorce attorney with a solid track record of successful cases involving business in divorce. Your attorney should be able to review your situation and help you determine the best available options for approaching your divorce and protecting your business interests.