Business owners facing divorce in Nebraska may face a unique set of legal and financial hurdles. Being prepared can help ensure the survival of the business while seeking equitable distribution. If you are a business owner thinking about ending your marriage, how might a divorce decree alter the daily operations or ownership structure of your company?
Business valuation
Courts must determine the fair market value of a business before dividing assets. Professionals often use the income approach or market approach to set a precise amount. An accurate valuation can prevent one spouse from receiving an unfair share of the company’s future earnings.
Marital versus nonmarital assets
Nebraska courts also generally exclude gifts or inheritances from the marital estate. However, a business owner must avoid mixing these personal funds with joint marital accounts to prevent commingling.
Thus, a legal team or a forensic accountant must trace assets to find out if a business existed before the wedding. Holding onto original incorporation papers or initial capital contribution records can be vital for protecting this premarital value.
Double dipping
In addition, Nebraska law typically does not allow using the same business income to calculate both property division and alimony. This rule ensures that a spouse does not pay twice from the same financial source.
Buy-sell agreement
Finally, a well-drafted buy-sell agreement can decide how a spouse exits the business during a divorce. This contract often contains “triggering events” that allow remaining partners to buy a divorcing spouse’s interest. This agreement can provide a safety net that maintains corporate stability during personal transitions.
Aiming to protect the business
Strategic planning can save the legacy of a company. While a decree marks the end of a marriage, it also brings forth professional independence. With legal advice, you may receive guidance for handling financial complexities while aiming to protect the health of your business.
