Facing a divorce is one of the most difficult life changes that anyone goes through. In addition to being emotional and draining, afterward your life will be entirely different.
For business owners, the stakes are even higher. Not only your personal life but your professional life as well could be permanently altered by your divorce. What will happen to your business after a divorce in Ohio?
Is Ohio a community property state?
Ohio is not a community property state. The Ohio courts will divide property into two categories: personal and marital. Marital property is subject to Ohio’s equitable distribution laws, while personal property remains the property of the individual spouse that owns it.
Is your business a marital asset or personal property?
Generally, Ohio considers a business to be a marital asset, regardless of either spouse’s involvement. However, courts can divide the value of the business into a portion that is marital and a portion that is personal.
To determine the appropriate ratio, the courts will ask:
- Does the concept for the business provide its main value?
- Did one spouse develop the company’s concepts and ideas before the marriage?
- Is the company’s value determined by the time and effort put into running it, and who does that?
How are marital assets divided?
The courts will likely accept any property division agreement you and your spouse agree upon. However, if spouses cannot agree, a judge will divide the marital property in a way they feel is fair and equitable, not necessarily a 50-50 split.
Dividing your business during a divorce is an emotional and complicated process. Staying calm and reasonable will help the process run as smoothly as possible.