Everybody knows that owning a business is unpredictable. On the other hand, love and marriage can be just as unpredictable. This is why around half of all marriages end up in divorce. However, this can be even more challenging when the couple co-owns a business of some sort. It can be difficult in Ohio, or any state, to determine how to deal with the business during the property distribution process.
Property Distribution In Ohio
When a couple divorces a business will be considered just another asset. This means it will be subject to applicable marital property laws in Ohio. First, it has to be determined whether or not the business actually can be characterized as marital property. The existence of a prenuptial agreement could also change how the business is characterized in the divorce. There are various other factors as well which will be considered. It may be wise to have a divorce attorney blue ash oh help with the intricacies of state laws.
Marital Vs. Separate Property
Every asset of the divorcing couple will be classified as either marital or separate property. Marital property is the jointly-owned assets of the married couple. However, whether or not an asset is considered marital property will depend upon state law. Also, how the business is managed over the time period of the marriage can be a factor in ultimately determining how the asset is characterized for purposes of property division in divorce.
Community Property Vs. Equitable Distribution
The first thing to consider in property division during divorce is to find out whether one’s state is a community property state or does it operate as an equitable distribution state. Community property states divide almost all assets acquired during marriage as joint property. Property which each spouse owned prior to being married is considered separate property.
On the other hand, there are some exceptions to this rule. One of these exceptions is inheritances and gifts given to one spouse while married. These assets are considered separate property. However, commingling those assets with community property may change its separate property status.
Alternatively, equitable distribution states, such as Ohio are less straightforward when it comes to property division. Equitable distribution states divide the property “fairly” however not necessarily equally. Ultimately, the judge will decide how property is divided between spouses, however the judge will be restrained by guidelines set for by state law.
When Is A Business Considered Marital Property?
If divorcing spouses have co-ownership of a business, it will be classified as marital property. However, there are other ways in which a business could be considered marital property during a divorce. If a company was started during the marriage, it is likely to be characterized as marital property. Also, even if an enterprise was started by one spouse pre-marriage it may still be considered marital property if the other spouse contributed significantly to the company while the couple was married.
Obtaining Legal Advice
Divorce is not only about determining how to classify assets and property. The actual divorce process can be quite complicated and time-consuming. Failure to file the various proper legal documents on a strict schedule can result in an adverse ruling from the judge in the divorce case. Therefore, it may be helpful to have a legal professional help with navigating the litigation process.…