Running a business takes considerable time and effort, and navigating the process of ending an unhappy marriage can complicate things. This is because it is not always clear whether business debts and income are considered marital or separate property.
Sorting out business assets
Married couples in Florida should expect to divide their joint debts during divorce. If a business owner paid for marital expenses with a loan taken out against his or her business, then that debt could be considered marital property. The owner’s spouse may choose to contest this, though. Insisting that he or she had no knowledge of the loan or was unsure of where the money came from might be enough to settle it as a business debt. This leaves the responsibility of repayment with the business owner.
His or her business income can also prove problematic. Many business owners in Florida choose to redirect a portion of their incomes toward business debts, meaning that their take-home pay is less than what they have access to.
When a business owner is going through a divorce, the court may consider both the redirected money and the take-home pay as his or her entire income. Spousal and child support payments could then be set based on the higher figure and not what the business owner is bringing home.
It is usually best to keep business and marital assets separated, but this may be easier said than done. Actions that made sense at the time — like using a business loan for marital property — can have unintended consequences in the future. But there is no reason to put one’s business and personal financial stability at risk even in divorce.
Seeking guidance from a knowledgeable party could provide valuable insight for business owners in this type of situation.