Divorce and Business Ownership in Virginia: Protecting Your Interests

Going through a divorce in Virginia is difficult for anyone but can be particularly challenging for business owners. If you or your spouse started a business either before or after you got married, you likely have serious concerns about how it will be handled in Virginia divorce proceedings.

The rules regarding the equitable division of marital assets apply in Virginia divorce cases and extend to any businesses owned by the couple. We explain key factors in how it is handled and offer tips to help safeguard your interests.

Division Of Business Assets In Virginia Divorce Proceedings

The rules of equitable division apply to all Virginia Family Court divorce cases. Under the Virginia Code, marital property and assets are divided fairly between the couple rather than equally.

When it comes to dividing a business and its assets, the court considers a variety of factors:

• Marital vs. Separate Property: If you started the business during the marriage, it is generally considered marital property subject to equitable division.
• Spousal Contributions: Even if a business is a separate property, spousal contributions may be an issue when dividing assets.
• Business Valuation: A forensic accountant or business valuation expert may be needed to evaluate the business’s worth. The value will impact how it gets divided.
• Ownership Interest and Buyout: If both spouses are involved in the business, the one who wants to keep it may offer a buyout or trade other assets to maintain ownership.

How To Protect Your Business During Virginia Divorce Proceedings

According to the U.S. Small Business Administration (SBA), there are nearly 800,000 small businesses in Virginia, comprising 99.5 percent of all businesses in the state. As a business owner, follow these tips to protect your rights in the event of a Virginia divorce:

• Consider A Prenuptial or Postnuptial Agreement: A pre or postnuptial agreement can determine each party’s rights regarding business assets in the event of a divorce.
• Document Contributions: Document all of the contributions you made to the business and keep accurate records regarding operations.
• Work with a Business Valuation Expert: Get a professional valuation and determine the fair market value of your business to ensure that it is divided fairly.
• Consider Alternative Dispute Resolution: Mediation is generally more cost-effective and time-efficient than taking your case to court. It also provides the opportunity to negotiate a more customized settlement catered to your particular circumstances and business rather than having the judge decide.

Schedule a Consultation Today with Our Experienced Virginia Divorce Lawyer

As a business owner, getting a divorce in Virginia can be a complicated process and could put your business at risk. At Schwartz Kalina, PLLC, we understand the complex nature of these cases and all that is at stake. Our legal team is here to help you every step of the way.

We provide trusted guidance and the professional legal representation that business owners need. To protect your rights and financial interests, call or contact us online. Schedule a consultation today with our experienced Virginia divorce lawyer.

Sources:

law.lis.virginia.gov/vacode/title20/chapter6/section20-107.3/

advocacy.sba.gov/wp-content/uploads/2022/08/Small-Business-Economic-Profile-VA.pdf