Business Owners & Divorce

For a business owner, divorce brings a unique kind of anxiety. You have spent years, perhaps decades, building your company from the ground up. It represents your hard work, your financial future, and your legacy. The thought of losing control or seeing the business dismantled during a divorce is frightening.

Your fears are valid, but the situation is manageable with the right approach. You need professional legal guidance to secure a fair outcome. Since 2008, Attorney Teresa Fout and the team at Fout Law Office have supported business owners through these difficult transitions. We provide the strategic advocacy required to protect your life’s work.

How Businesses Are Treated in Ohio Divorce

Ohio is an equitable distribution state. This means the court divides marital property fairly, though not always equally. The first challenge is determining if your business is marital property, separate property, or a mix of both.

Separate property generally includes assets you owned before the marriage. Marital property includes assets acquired during the marriage. However, business ownership often blurs these lines. A business you started before your wedding might still have marital components. The court looks at several factors to decide how to treat the business:

• When the business was established: If it existed prior to the marriage, the initial value might be separate, but growth during the marriage could be marital.
• Contributions from both spouses: If your spouse worked for the company, handled the books, or contributed financially, they may have a claim to its value.
• Commingling of assets: Using a joint bank account to fund business expenses or depositing business revenue into a family account can turn separate property into marital property.

Methods of Dividing a Business as Marital Property

If the court determines that all or part of your business is marital property, it must be divided. There are several ways to handle business assets during a divorce.

• Buyout: This is the most common solution for owners who want to keep full control. You purchase your spouse’s share of the business. This is often done by trading other marital assets, such as equity in the family home or retirement accounts, to balance the ledger.
• Sale and division of proceeds: If neither spouse wants to run the business, or if there are not enough other assets to facilitate a buyout, the partners may agree to sell the company. The profits are then split equitably between the parties.
• Co-ownership: In rare cases, divorced spouses may choose to continue owning and operating the business together. This requires an amicable relationship and a solid operating agreement to define roles and responsibilities.

Before any division occurs, we must establish the value of the business. Accurate business valuation is critical. We work with professionals to determine fair market value so you do not overpay in a buyout or lose your fair share.

Protecting Your Business During Divorce

Business owners can take proactive steps to safeguard their company’s future. While legal strategies depend on your specific circumstances, there are general practices that strengthen your position.

• Keep detailed financial records: Clear documentation helps distinguish between business assets and personal assets. You must be able to prove which funds belong to the company.
• Avoid commingling funds: Keep your business and personal finances strictly separate. Do not pay personal bills from the business account or vice versa.
• Consider marital agreements: A prenuptial or postnuptial agreement can explicitly state that the business remains separate property.
• Work with valuation professionals: Do not guess the value of your business. Rely on objective assessments from qualified professionals to guarantee accuracy.

Let Fout Law Office Secure Your Business’ Future

Dividing a business requires more than just general family law knowledge. It demands a deep understanding of finance, valuation, and asset protection. Fout Law Office has extensive experience handling complex property division cases for business owners in North Canton and the surrounding areas.

We take a personalized approach to every case. We know that your business is not just an asset on a spreadsheet; it is your livelihood. Our goal is to protect your interests while finding practical solutions. Whether through skilled negotiation, mediation, or litigation in the courtroom, we work to keep your business intact.

Contact us today to schedule a consultation. We are here to help you protect what you have built.