Divorce for Business Owners

On Behalf of | Oct 18, 2021 | divorce |

In New Hampshire, high-asset divorce can be complex, especially when one of the parties is a business owner. It will take careful planning to minimize the taxes and costs of the divorce, and the less acrimonious the divorce is, the easier this will be.

Managing Business Ownership in Divorce

Dividing the assets of a business, determining its value, determining how much personal income flows from a business, and dividing that value and income is already challenging for divorce court, and the tax implications on top of that can be severe. For example, a business asset like a vehicle or piece of equipment that was written off for taxes against the business’s revenue might be transferred to the other spouse, who uses it for personal use, and then suddenly incurs new and back taxes.

Furthermore, the court is not designed to help business owners and their spouses minimize taxes when they are divorcing. So an agreement that seems equitable to the court on paper might lead to a tax burden on one or both spouses unless they can work together to make a plan that accounts for the complexities of business ownership.

High-asset divorce is already fraught with risks because it entails dividing high-value assets with varying tax treatments and varying levels of liquidity, which can also affect the viability of the business. The more you can agree on a fair and viable plan to divide the assets and income, the better you will be able to handle the taxes and the potential impact of the divorce on the business’s day-to-day proceedings and asset holdings of various kinds.