People who run businesses or professional practices rely on their organizations for income. They may have long-term plans that include developing the company and eventually listing it for sale or passing it to their children when they retire.
All of those plans can be at risk in cases where successful professionals and business owners divorce. Particularly in cases where a spouse may not have contributed to the company, the owner may hope to retain sole ownership and control over the business when they divorce.
Are businesses considered separate property during the asset division process of an Indiana divorce?
Indiana doesn’t recognize separate property
In most states, there are certain assets that people can protect as separate property during a divorce. Assets owned before marriage and inherited property are often separate assets during divorce proceedings.
Indiana does not recognize separate property during the asset division process of a divorce. Instead, the state takes a unique, whole-pot approach to resources. Everything owned by the spouses is part of the marital estate, regardless of when they acquired the property, how they paid for it and whether they used marital income to maintain that asset.
A business’s value may play an important role in the overall property division process, but spouses can often protect their businesses and professional practices. Especially in cases where they negotiate settlements outside of court, they may be able to avoid sharing business authority with a spouse and can potentially avoid selling the business, liquidating assets or leveraging the company as part of the property division process.
Working with a lawyer familiar with high-asset divorces can be helpful for business owners. The right legal guidance can make it easier to preserve key resources.