Divorce is never easy, and when one spouse owns a business, the process can become even more complicated. A business often represents years of hard work, personal sacrifice, and financial investment, making it a valuable asset that needs careful protection. In Tennessee, understanding how a court may view and divide business assets is essential to ensuring a fair outcome in your case. Due to the unique legal and financial issues involved, it is crucial to contact a divorce lawyer with experience in business matters as soon as possible to protect your rights.
Continue reading to learn more about navigating a divorce when one spouse owns a business.
Divorce and Your Business: What You Need to Know to Keep Your Business Assets Safe
Many individuals going through a divorce while owning a business naturally wonder whether their spouse can make any sort of claim of ownership on their business. The first step in addressing this concern is to determine whether the business can be categorized as either separate or marital property. According to Tennessee law, separate property will be kept separate; however, all marital property will be divided equitably between the spouses. Several relevant factors can be considered when making this determination, including:
- When the business was established, i.e., before or during the marriage.
- How the business was funded.
- The type of business structure (i.e., sole proprietorship, LLC, partnership) and whether there are co-owners or an operating/ownership agreement.
- Whether a prenuptial agreement exists that specifies separate assets.
- The extent to which marital funds or joint efforts contributed to the business’s growth.
- Whether the other spouse participated in the operations or day-to-day management of the business.
It is important to know that even in cases where one spouse founded a business prior to a marriage, the business could still be considered partially marital if the other spouse contributed labor, resources, or strategic guidance in operating the business. When a spouse may have a claim to a business, it is important to consider a buyout. In certain divorce cases, one spouse may be required to purchase the other’s share of the business. In other instances, the court may order the business to be sold and the proceeds divided between the spouses.
In some cases, particularly during contentious divorces, a spouse may attempt to assert a partial or unfounded claim to a business that is clearly separate from the marital estate. While such claims may be baseless or, in some instances, frivolous or malicious, they still require time, effort, and legal resources to combat in court. For this reason, it is critical to work with experienced legal counsel who not only understands family law and divorce proceedings but also has a solid grasp of business law and the nuances of ownership structures.
The Importance of Having a Tennessee Divorce Attorney
Divorce is always a challenging and emotional process, but when one spouse owns a business, the stress can be significantly higher. For many entrepreneurs, a business is more than just a source of income, as it also represents years of hard work, personal sacrifice, and perhaps a legacy. In a Tennessee divorce case, protecting this asset becomes a central concern, as the business may be considered part of the marital estate depending on factors such as contributions from both spouses, funding, and involvement in operations. Whether the business is jointly managed, inherited, or solely owned by one spouse, unique legal, financial, and emotional complexities could arise that require careful navigation. Having the right attorney can protect your business, fight complex claims, and safeguard both your personal and professional interests.
Protect Your Business During Divorce with J. Ryan Johnson Law
Navigating the complexities of business ownership during a divorce can be challenging and have high stakes. J. Ryan Johnson Law, based in Nashville, is the law firm has the experience and insight to protect your interests and ensure a fair outcome for both your family and your business. Contact us today schedule a consultation and take the first step toward securing your future.
