A small business is valued during divorce by determining its fair market value using accepted financial methods such as income, market, and asset-based approaches. Courts focus on the business’s true earning power, marital versus personal goodwill, and the owner’s real compensation. This guide explains the process in simple terms, answers common questions, and highlights costly mistakes most articles overlook. Why Most Articles Fall Short (Gap Analysis) Many existing articles explain what valuation methods are used but fail to explain: This article closes those gaps with practical, plain-language explanations. 1. What Does “Valuing a Business” Mean in a Divorce? Valuing a…
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Can My Spouse Take Half My Business? Short answer: No, your spouse cannot automatically take half of your business in a divorce. In most cases, the court looks at fairness, not a strict 50/50 split. If your business was started or significantly grew during the marriage, its value may be considered marital property and included in the overall division of assets — but that does not mean your spouse literally takes half the company. This article explains exactly how courts treat businesses in divorce, what really happens to ownership, and how you can protect your livelihood. Why Most Online Articles…
Short answer: Yes—your business can be considered marital property, in whole or in part, depending on when it was started, how it grew, and whether marital time, effort, or money contributed to its value. Even businesses owned before marriage may be partially divisible if they increased in value during the marriage. This guide explains how courts decide, what spouses can claim, and how business owners can protect themselves, in clear, non-technical language. Why Most Online Articles Fall Short (And How This One Is Better) Most law-firm articles: This article fixes that by answering 10 related questions inside one comprehensive guide,…
Courts typically look back three to five years at a self-employed person’s income to determine an accurate average earning capacity. This multi-year review helps judges account for income fluctuations, identify patterns, and prevent underreporting before legal proceedings such as child support, spousal support, or divorce settlements. Why Courts Look Back Multiple Years for Self-Employed Income Unlike salaried employees, self-employed individuals often experience uneven income due to seasonal work, contracts, or business cycles. A single year rarely reflects true earning ability. By reviewing several years, courts aim to: This approach is widely used across family courts, even though exact rules vary…
Yes, legitimate business expenses can reduce child support payments, but only when they are necessary, reasonable, and strictly business-related. Family courts do not rely solely on tax returns. They closely examine expenses and often add back personal, inflated, or discretionary costs to calculate your true income. The goal is fairness—support based on real earning capacity, not paper losses. Why Business Owners Face More Scrutiny in Child Support Cases Courts treat self-employed parents differently from salaried employees because business income is easier to manipulate. Judges know that a business owner can: Because of this, courts focus on economic reality, not just…
Can a Self-Employed Person Hide Income During Divorce? Yes, a self-employed person can attempt to hide income during a divorce, but it is illegal, risky, and often uncovered by courts. While business owners have more control over how income is reported, judges, lawyers, and forensic accountants are trained to spot red flags. When hidden income is discovered, the consequences can include fines, loss of credibility, and unfavorable financial rulings. Why Self-Employed Income Is Harder to Track in Divorce Unlike salaried employees who receive predictable paychecks, self-employed individuals control: This flexibility creates opportunity for manipulation, but also leaves paper trails courts…
Running your own business offers freedom, flexibility, and financial opportunity—but it also creates unique legal and financial risks when you’re married or planning to marry. For self-employed individuals, income is often unpredictable, business assets can be complex, and personal finances may overlap with business finances. This is where prenuptial and postnuptial agreements for self-employed couples become essential tools. These agreements help protect businesses, clarify expectations, and reduce costly disputes if a marriage ends. This beginner-friendly guide explains everything you need to know—without legal jargon. What Are Prenuptial and Postnuptial Agreements? A prenuptial agreement (prenup) is a legal contract signed before…
Divorce is never easy, but divorcing when you’re self-employed adds an extra layer of complexity. When you run your own business, freelance, or work as an independent contractor, your income, assets, and future earning potential are often harder to measure than those of a salaried employee. Courts closely examine business finances during divorce, and mistakes can be costly. This beginner-friendly guide explains the legal, financial, and tax issues self-employed individuals face during divorce—and how to protect yourself while staying compliant with the law. Why Divorce Is Different When You’re Self-Employed Unlike traditional employees, self-employed individuals often: This creates challenges around…
Divorce is financially stressful for anyone, but it becomes far more complicated when one spouse is self-employed or owns a business. Because income isn’t always paid through a regular paycheck, self-employed individuals have more control over how money appears on paper. This flexibility often leads to one of the most serious issues in divorce cases: self-employed hiding income during divorce. While some people believe they can “temporarily” conceal money to reduce alimony or asset division, courts treat this behavior as financial fraud. The consequences are usually far worse than being honest from the start. This guide explains, in plain English,…
Divorce can be stressful, but it becomes even more complicated when one spouse is self-employed. Unlike salaried employees who can show a W-2, a self-employed spouse must rely on multiple records to prove income. This often leads to confusion, disputes, and concerns about hidden or fluctuating earnings. This beginner-friendly guide explains documenting income as a self-employed spouse in divorce, how U.S. courts evaluate that income, and what documents are commonly required for alimony and child support decisions. What Does “Documenting Income” Mean in a Divorce? In divorce cases, income documentation is not about tax filing alone. Courts want to understand…