If you are married and own a business, the ownership structure from a tax standpoint depends on how it was formed and the business’s operations. Tax status and community property are distinct legal issues. Management can be controlled by the Operating Agreement or by law. In the event of divorce, a person of a high net worth business will question the division, valuation, and subsequent management of its business. The answer is dependent on multiple factors.
In the event of divorce, specific factors a court should consider to determine if your spouse has a vested interest in the business include:
- Whether you were married when you started the business
- The formation structure of the business
- The operating agreement or bylaws which may contractually define an exit strategy
- The physical and financial contributions you and your spouse made to the business during your marriage
Every business, like every marriage, is unique. If you have legal questions about how marriage or divorce may affect your business, reach out to a lawyer at The Louisiana Family Law Firm for legal advice.
