I’m going through a divorce and started a small business a year and a half ago. Now I’m wondering if my business inventory (which is more like debt at this point) is subject to the divorce? She wasn’t involved at all in building the business. Anyone have experience with this?
Jo said:
I think the business could be considered marital property, depending on the state. Did you get an appraisal yet? It could help to show the value, even if it’s a small amount.
I haven’t had it appraised yet. I guess I’ll talk to her about it and see if she even cares about it.
It depends on your state laws, but from what I know, if it’s a community property state, everything earned or acquired during the marriage gets divided. That includes both profit and debt, I think.
Tatum said:
It depends on your state laws, but from what I know, if it’s a community property state, everything earned or acquired during the marriage gets divided. That includes both profit and debt, I think.
Yeah, someone mentioned community property too. But does that mean my business debt could be split as well?
Tatum said:
It depends on your state laws, but from what I know, if it’s a community property state, everything earned or acquired during the marriage gets divided. That includes both profit and debt, I think.
Yes, the business debt counts. Anything related to the business during the marriage could be part of the division.
I was in a similar situation. When I went through my divorce, my lawyer told me to hold off on buying any new inventory. It could complicate things if you’re trying to keep everything simple.
Darwin said:
I was in a similar situation. When I went through my divorce, my lawyer told me to hold off on buying any new inventory. It could complicate things if you’re trying to keep everything simple.
I’m trying to figure out if I can still keep working as usual. I’m not sure about holding off on inventory though. It’s tricky.
Darwin said:
I was in a similar situation. When I went through my divorce, my lawyer told me to hold off on buying any new inventory. It could complicate things if you’re trying to keep everything simple.
It’s tough, for sure. But if you really need the inventory to run your business, I guess it’s okay. Just avoid big purchases that might be seen as trying to increase value right before the divorce gets finalized.
So, you should still be able to work, but anything huge or new shouldn’t happen unless it’s necessary for the business. Basically, don’t make any major purchases that could look like you’re trying to boost the business’s worth for the divorce. Keep things normal.
@Will
Got it! So I should avoid anything that looks like I’m trying to make the business seem more valuable. Thanks for clearing that up.
I’m not a lawyer, but it sounds like you need to talk to her and see if she wants the business at all. If she’s not interested, you might be in the clear. But it can’t hurt to get some legal advice.
Winter said:
I’m not a lawyer, but it sounds like you need to talk to her and see if she wants the business at all. If she’s not interested, you might be in the clear. But it can’t hurt to get some legal advice.
Yeah, I’ll talk to her about it. I wasn’t sure if she’d want anything to do with the business, but I’ll find out. Appreciate the advice!