Divorce and business: What one has to do with the other

Many people in Kentucky will do many things for the first time in their lives in 2017. For some, this will include divorce. Others who have gone through the process understand the many challenges that can arise regarding future care and upbringing of children, division of assets and other divorce issues. One aspect that is often overlooked (until it's too late) is business interests.

Any spouse going through divorce who co-owns a business with his or her soon-to-be former spouse may want to ensure the end of marriage does not result in the end of the business (unless, of course, he or she wants it to be the end of the business, in which case, that opens a whole new set of challenges). Kentucky is not a community property state. This means income or items acquired during marriage are not automatically split 50/50 in divorce. Also, various issues may surface during proceedings related to a business that require the agreement of both spouses (as business owners), such as lease renewals or investment approvals.

There have been many cases where spouses have used business entities to hide assets in anticipation of divorce. For instance, a spouse may sell business assets for less than their actual value to a friend with the intent to buy them back after a settlement is reached. The divorce court may intervene to rectify the situation.

Prenuptial and post-nuptial agreements are valuable tools that can help many Kentucky business owners avoid problems related to business in divorce. Anyone with questions regarding such issues may seek answers through consultation with an experienced attorney. Skilled guidance often ensures that one's personal rights and business interests will be protected in court.

Source: theguardian.com, "On Divorce Day: is your business protected?", Karen Holden, Jan. 9, 2017

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