Divorcing Your Spouse’s Family Business

Once a family business stays in the family for multiple generations, inevitably some of the family members who have participated in it are each other’s relatives by marriage.  Perhaps you were married for such a long time, working in your spouse’s family business alongside your in-laws, that you stopped keeping track of who made which contributions to the continued success of the family enterprise.  The family that works together stays together, until they don’t.  Separating your marital property after a long marriage is never simple, but things are even more complicated when one spouse owns a business or other valuable assets jointly with his or her family of origin.  Most likely, you and your spouse will have to work things out in divorce mediation to decide how much to compensate the spouse who isn’t related to the family business by blood for his or her contributions to it.  If your case goes to trial, the court will decide how much of the business, if any, is a marital asset, and the answers are far from clear cut.  If you are getting a divorce after working with your spouse and in-laws in their family business, contact a Birmingham divorce lawyer.

The Best Way to Keep Your Ex’s Hands Off of Your Generational Wealth Is a Prenup

An Alabama couple spent years in family court debating property division issues related to divorce.  The husband and his sister jointly owned a company that owned rental real estate properties; they had inherited it from their father.  Inherited assets are non-marital property, but the court may treat them as marital if there is evidence that the couple treated them as marital assets.  In this case, the wife never drew a salary from the family business, but she was often a point of contact for tenants and spent time recruiting tenants to fill vacant units.  Furthermore, the husband used some of the company’s funds to renovate the marital home after it got damaged in a hurricane.  The trial court treated the business as marital property and ordered the husband to pay money to buy the wife out of it.

When the husband appealed, the appeals court re-categorized the business as the husband’s separate property.  In this case, the wife had her own separate property, namely a retirement account from a job where she had worked before the marriage.  The best way to avoid situations like this is by signing a prenuptial agreement.  You can specify that the family business is non-marital property.  If you do this, it makes sense for the other spouse to draw a salary if he or she works for the family business, so that his or her contributions are not unpaid labor.

Contact Peeples Law About Divorce After Working for Your Spouse’s Family Business

A Birmingham family law attorney can help you if you put years of work into your spouse’s family business, and now that you are getting divorced, you have nothing to show for your efforts.  Contact Peeples Law today to schedule a consultation.

Source:

scholar.google.com/scholar_case?case=15446460460583475811&q=divorce+van&hl=en&as_sdt=4,61,62,64&as_ylo=2014&as_yhi=2024