Is My Spouse Entitled to Half My Business?
When starting your own business, you may ask yourself, “Is my Spouse entitled to half my business?”
Starting a business can be a huge undertaking. And if you begin a new venture while married, there are certain rights that your spouse has to that business.
If the marriage does not work out, they have a claim to specific assets of the business.
In Nevada, there are laws that you must follow when it comes to community property and marital assets. This is important to consider when you own your business, especially if your spouse is with you when you begin the business.
You can also take steps to protect your business in the event of a divorce.
What is Community Property?
Nevada is a community property state. Each spouse gets entitled to 50% of assets and debts acquired during the marriage. During a divorce, the court will divide these assets between the couple.
You may wonder, “is my wife entitled to half my income?” In most cases, this is true. This pertains to income acquired during the life of the marriage. Depending on the court’s decision, you may get ordered to pay alimony and child support.
Exceptions include gifts, inheritances, or property covered by premarital agreements. A prenuptial agreement can ensure that your property will remain yours.
Business Ownership During a Divorce
If my husband owns a business, do I own it too?
The answer depends on when the business started up. If your spouse began the company before marriage, they could claim it is a premarital asset.
Yet, if the business starts during the marriage, it becomes community property. This law applies even if your husband bought it without your input. Under Nevada law, you are still considered a partial owner.
Even if a business begins before marriage, it can still become community property. For example, if you contribute to the company’s growth, maintenance, or other aspects. In that case, you might be entitled to some or even half of the business.
What’s the best way to resolve the split of business assets?
Negotiating a property settlement and asset division is your best move.
With our help, you may be able to determine an acceptable division of business assets. If both parties cannot agree, a judge will decide the division of business assets. These decisions may be unsatisfactory.
So, is my spouse entitled to half my business?
There are three ways to divide business assets if you do not want a 50-50 split on community property.
The first result is one spouse buying out the other spouse. The buy-out could be in cash, either up-front or in payments.
It may also be on an asset basis. This option involves turning over property such as a home or other property to your spouse. In exchange, they give you their interest in the business.
The second option is to sell the business and share the proceeds. This option may include establishing a value for the property. Depending on how long this process takes, it may not be the most viable option.
This option will not be the fastest solution as it takes time to sell a business.
The final option can be for both spouses to continue as business partners. If the divorce is amicable, continuing to own and run a business together can be the best option.
This way avoids the need for a business valuation. Plus, you may include a 50-50 ownership in the divorce agreement. Yet, there is potential for issues if there are disagreements on business decisions.
Protecting Your Business
There are a few ways that you can protect your business and keep complete ownership.
If you own a business before marriage, you can sign a pre-or post-nuptial agreement. If there are provisions for business assets in them, your spouse may not get any of your business.
The court will review the agreements to ensure they are legal. If they do not, then community property regulations will get followed.
Seeking Professional Help
Is my spouse entitled to half my business? On most occasions, the answer is yes. But, as explained, there are options for you to protect your business, and we can help.
When it comes to the division of marital property, you need the help of a trusted divorce attorney.
We can help you navigate Nevada’s complicated community property laws. Call us at (702) 433-2889 today if you seek a prenuptial or post-nuptial agreement.