A divorce can result in financial challenges. However, if one of the divorcing spouses is self-employed, the financial issues surrounding the proceedings can be particularly difficult for both divorcing parties.
A self-employed spouse may try to protect their assets by not fully disclosing what they have. Also, the spouse of the self-employed partner may attempt to assume more of the self-employed spouse's assets than they should.
Here is some information to help divorcing spouses take proper precautions when self-employment is involved in their case.
For the Self-Employed Spouse
If you earn your income through self-employment, you should be prepared to protect the assets of your business. The fair distribution of property in a divorce can be tricky. If your partner claims that your earnings are higher than they actually are, you could lose a portion of your proper share of the marital assets. Additionally, any alimony or child support assessments may skewed.
Here are a few measures that a self-employed spouse can take to protect their hard-earned assets:
- Maintain and collect your business' documentation. Written documentation that is properly dated can help you paint an accurate picture of your financial situation. Additionally, the documentation is difficult to dispute with verbal accusations.
- Get the help of an accounting professional. An accountant can review your business records to give a proper assessment of your business' worth. Since the estimation is presented by a trained professional, it is likely to be deemed more accurate than the claims of your spouse.
For the Partner Divorcing the Self-employed Spouse
Without a W-2, your spouse may more easily hide their assets from the courts. An inaccurate depiction of the worth of your spouse's company may leave you with fewer assets than you deserve.
To ensure that your interests are protected, try the following:
- Gather as much written documentation about your spouse's business as you can. If your spouse is dishonest, they may only present certain records, leaving others out intentionally. If your spouse tries to prevent you from collecting the information, you may have to obtain a written discovery to force your spouse to comply.
- Obtain professional help. By hiring a business investigator or accountant, you can increase your likelihood of locating any hidden or relocated assets that your spouse may have. The professionals will also notate any inconsistencies that may be found in your spouse's financial records.
If you or your spouse is self-employed and plan to divorce, schedule an appointment with a family attorney in your local area.Share