Anyone who owns a successful business in Woodland Park or the other communities around Colorado Springs probably know well the amount of time and effort it took to get their organization to a point where it turned a profit.
Many small and family-owned businesses fail quickly despite the best efforts of their owners.
In other cases, what seemed like a promising start for a small business turns out just to be a fleeting success, as family quarrelling or legal problems can cause the business to collapse just as quickly as it started to grow.
Divorce, or a legal separation for that matter, is one of those crises that might wind up tanking a small business.
For one, there’s going to be the question of how much the business is worth. Like other assets, a spouse’s interest in a business will in many if not most cases be marital property subject to a fair division.
Therefore, the parties will likely have to go to trouble of hiring an expert to figure out how much the business would sell for if it were on the market.
A business owner may overnight lose half this value depending on how the judge decides to divvy up the business. Moreover, in some cases, there may be an argument that some or all of the value of a business belongs to one spouse or the other outright.
For example, if one person owned the family business well before she got married, the owner may argue that she should keep her interest in the business without having to share it.
On a related point, in many cases, people who own family businesses sign premarital agreements before tying the knot, and these agreements could specify which spouse gets the business.
There are also practical problems with deciding how actually to divide up the business.
While there are some cases in which both former spouses know the family business well and are willing to keep working together professionally, in many situations, the spouse who wants to stay in the business will have to buy out the other spouse.
A buyout can make for some difficult decisions.
On the one hand, transferring the shares of a business to one’s former spouse may strategically be a bad move, especially if the former spouse doesn’t know the ins and outs of the business.
On the other hand, few Coloradans may have funds available to pay off their former spouses.
The bottom line is that most Coloradans who own a business and who are facing divorce and legal separation are probably going to face some sensitive and complicated legal issues. Usually, it is a good idea in such cases to seek the assistance of a family law attorney.