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Divorce and the self-employed business owner: what to expect

Being self-employed brings a lot of satisfaction to many people in the Cincinnati area, but it can also cause headaches and sleepless nights. So can problems in your marriage. If you and your spouse cannot work out your issues, divorce may be the only option left.

That could put the ownership of your small business into question. Both Ohio and Kentucky are equitable division states. That means that all marital property must be divided “equitably” or reasonably fairly between the spouses. Because the property division does not have to be split 50/50, you have a lot of room for creative solutions that let you keep your business intact and in your hands going forward.

Does my spouse have a claim on my business?

Even if your spouse never contributed any work to your self-employed business, it will likely still be considered marital property. Divorce law recognizes indirect contributions that one spouse makes to help the other spouse in their career. For example, if your spouse was the primary breadwinner while you were getting your business off the ground, that indirect contribution could give your spouse a share of the business. Even if they focused on keeping the house and raising the children, that work freed you to focus on building your business. The law states that both spouses get to enjoy the fruits of that success.

Knowing your options

However, if keeping the business you built for yourself is a priority, your attorney should be able to find a way to make this happen. For example, you can buy out your spouse’s share if you or the business has cash available. Or you can turn their share into spousal support, paying them regularly for a fixed period of time. There are other options that your lawyer can go over with you, so you know your options.