Even the most well-prepared individuals sometimes overlook important aspects of their situation that come back to haunt them later. In reference to marriage and divorce, many individuals find it too overwhelming to consider everything that may impact their financial well-being. However in the event you own your own business and get married, preparation and planning are crucial to protecting your interests.
It is common knowledge that property and assets obtained before marriage are not considered marital property. These individual assets are not subject to property division in a divorce. While this knowledge may offer you peace of mind, it should not be used as the only source of protection for your business.
Even if your business was created before your marriage, your divorce may impact it, especially if your business is successful and has grown. If your spouse has had any hand in your businesses value appreciation, he or she may be awarded a portion of that increase. If you were just starting out when you married and now your business is quite successful, you may stand to lose quite a bit of equity.
This loophole in non-marital property division claims by way of active appreciation. The term active appreciation is used to describe any value appreciation caused by the actual effort of an individual. If your spouse has helped improve your business in any way, whether through physical effort or by producing ideas, advice or operations he or she may be entitled to a portion of it.
Individuals wishing to protect their business may benefit by speaking to an attorney. With their help, the issue of active appreciation may be addressed, and steps can be taken to provide you and your financial interests with added protection.