Understanding the Impact of Divorce on Business Ownership
Divorce is a life-altering event that extends beyond personal relationships, often impacting financial assets, including businesses. For business owners in Oregon, understanding how divorce proceedings may affect their company is crucial. The division of marital property under Oregon law can encompass more than just homes and vehicles; it may also include business interests.
Equitable Distribution of Marital Property
Under Oregon law, courts aim for an equitable distribution of marital property during a divorce (Or. Rev. Stat. § 107.105). This means that all assets acquired during the marriage are subject to division, which can include your business if it was started or expanded while married. Even businesses established before marriage might be considered marital property if they have appreciated in value due to joint efforts or investments made during the marriage.
Preparing for the Division Process
Business owners should anticipate a thorough evaluation of their company's value early in the divorce process. Often initiated by the spouse’s legal team, this valuation requires an impartial expert to assess various financial metrics such as cash flow, goodwill, and brand recognition to determine fair market value. It is imperative that your divorce attorney has experience with these valuations and can effectively communicate with financial experts involved in this process. Missteps here could significantly influence negotiations and outcomes regarding your business's future.
Strategies for Protecting Your Business Interests
To mitigate potential disruptions during divorce proceedings:
- Delegate Responsibilities: Consider temporarily delegating critical tasks or decisions to trusted managers or employees.
- Delay Major Decisions: Postpone significant business decisions until after finalizing the divorce when possible.
- Hire Experienced Counsel: Engage an attorney well-versed in handling divorces involving complex financial arrangements and businesses.
In some cases, retaining full ownership might be negotiated by offsetting other assets against your spouse's interest in the company or through buyouts using personal funds or other resources.
Conclusion: Seek Professional Guidance
Given these complexities surrounding high asset divorces involving businesses, consulting with knowledgeable legal professionals is essential for safeguarding what you've worked hard to build over time. At Pacific Family Law Firm, we specialize not only in general family law but also specifically cater our services towards protecting entrepreneurial clients' interests amidst challenging circumstances like divorces.
