Business owners who divorce should seek an out-of-court settlement rather than one that is litigated in court. The unpredictable nature of litigation can lead to outcomes you ever expected.
A business owned by one or both spouses is likely to be the most important asset involved in the divorce. As a result, both parties may have a financial interest in protecting it. The best way to do that is to avoid a courtroom battle.
Financial disclosures and the divorce process
One of the facts of a contested divorce is a full financial disclosure to the court. This will include tax and other information for your business. Cash receipts and expense deductions can raise questions in the eyes of the judge. If the income from your business is not the same as what your tax returns show, the judge may order one or both parties to turn the information over to the Internal Revenue Service.
A further risk of having a judge decide what will become of your business is that you may end up with a decision that satisfies neither party. A judge may order the sale of assets that you will need to produce income. That income may be important to both you and your ex.
If you and your spouse negotiate an out-of-court settlement, you can prepare your own financial disclosure and compile information on your own timelines. Through a collaborative process, you and your spouse can engage a neutral financial professional or forensic accountant to ensure both sides are comfortable with the financial information you use to make your decisions. Once you reach an agreement, you can present your settlement to the court to approve.
Sheldon E. Finman, P.A., is a family law attorney in Fort Myers who helps his clients seek seeks less adversarial ways to dissolve a marriage.