Protecting business in a divorce

[mikebox]

What is the name of your state? MD

Hello,

I'm in the process of getting a divorce. Six months after being separated I started a little business that is now my full time job. Does anyone have advice to how I can protect my business from being split or considered as income (business revenue vs. my salary) during the proceedings?

Thank You!

[LdiJ]

Originally Posted by mikebox

What is the name of your state? MD

Hello,

I'm in the process of getting a divorce. Six months after being separated I started a little business that is now my full time job. Does anyone have advice to how I can protect my business from being split or considered as income (business revenue vs. my salary) during the proceedings?

Thank You!

If its your full time job, its going to be considered as income, just as any full time job would be considered as income. Also, any business profits above and beyond a regular salary you take from the business, is also going to be income. However that's profit, not revenue. Make sure that you have a comprehensive, year to date, profit and loss report available that is fully backed up by proper accounting records.

Now, whether or not the business itself would be considered to be a marital asset, and therefore divisible as an asset, will depend on many different factors. For example, what is the nature of the business? Is it the type of business that really has no fixed assets other than you? If you were to be in a bad accident and hospitalized, could the business continue to earn revenue while you recuperated or would the business sit dormant? If it would sit dormant, then it can be argued that its not a marital asset. Particularly since you started it after you were separated.

However, if you took a marital asset, such as savings or a 401k, and invested it in equipment and supplies and/or the business could carry on without you, then it may indeed be divisible as a marital asset.