Protecting Your Business During a Divorce in Idaho

Idaho is a state of proud entrepreneurs, home to 183,972 small businesses. It’s also a place where people marry — and divorce — at higher rates than the rest of the country. Divorce is stressful for anyone, but business owners could face a set of additional concerns and unique challenges.

If you are an Idaho business owner who has decided to call time on your marriage, it is vital to seek qualified divorce advice to help protect your business interests.

In this post, we will explore the difference between marital and business assets and examine various options open to a divorcing couple that are in the best interests of both the business and each spouse.

Ways to Protect Your Business in an Idaho Divorce

Idaho is a community property state. This means that property acquired during marriage — including businesses — is said to be owned by the “community” of the marriage. It is also important to note that a couple’s debts are also community property in Idaho.

Community property laws mean that, in a divorce, a business considered community property will be divided equally between both spouses. However, there are exceptions built into community property laws that may help you protect your business assets.

Written agreements

Under Idaho state law Title 32, Chapter 9, 32-906, spouses may create a written agreement stating that “all or specifically designated property and the income, including the rents, issues and profits, from all or the specifically designated property shall be the separate property of one of the spouses.”

Simply put, during the marriage, you can formally agree to separate your business assets and profits. This could help to protect your business when you divorce.

Prenuptial agreements

Some couples take other proactive steps, such as signing prenuptial agreements. In Idaho, these are called premarital agreements and are enforceable during divorce proceedings. They can simplify the divorce process by detailing how a business will be valued and divided should you decide to go your separate ways.

When businesses are separate property

There are a few situations in which a business could be considered separate property rather than the communal property of the divorcing couple. This could be another way to protect business assets.

These scenarios include:

Inheritance: Generally, inheritance received by one spouse is considered separate property.

Gifts: Gifts from one spouse to the other become the property of the spouse who receives them.

Owned before marriage: If one spouse owned the business before marriage, it may be considered separate property. However, if both contributed funds or time to its running, it may be considered community property.

What constitutes community and separate property in a marriage can be confusing. An experienced divorce attorney can thoroughly review your assets and business interests and advise you on where you stand under Idaho law.

Your attorney can also help you navigate the following processes for dividing a jointly owned business while fighting for your best interests.

Navigating the Division of a Family Business

It is crucial to protect your business as it may impact the financial situation of both spouses and your children after your divorce. There are several legal options you can discuss as part of your divorce proceedings that can help protect your business and protect your finances.

Value the business

In order to divide your business fairly, you need to understand what it’s worth. There are several possible approaches, including the income approach, asset approach, and market approach.

The valuation process takes into account:

Fixed assets
Accounts receivable
Debts
Liabilities
Earning capacity
Goodwill
Reputation
Intellectual property

Your divorce attorney may recommend enlisting the help of a business valuation expert. He or she can accurately assess how much the business is worth, making it easier to divide your business fairly.

Consider the future of the business

Ensuring the stability of your business moving forward is generally in the best interests of all parties. For example, if children are involved, the income generated by the business may influence child support payments.

When a business is considered jointly owned property, there are generally three options available to divorcing couples in such situations:

Buy-out solutions: One spouse may offer to buy out the former spouse’s share. However, if both spouses have their assets tied up in the business, it is not uncommon for neither spouse to have the cash to make this a viable option. You may consider borrowing to fund a buyout or bringing a new partner into the business.

Selling the business: The business could be sold and the proceeds divided between the two spouses.

Co-ownership arrangements: The divorcing couple may decide to continue running the business together. However, as divorce proceedings can be emotionally charged, it is important to ensure everyone is on the same page by drafting a detailed written agreement about how the business will be run moving forward.

The Role of an Idaho Divorce Attorney

It would be unwise to try to navigate divorce proceedings without legal representation when a family business is involved. A qualified and experienced Idaho divorce attorney can help protect your business assets in the following ways.

Legal knowledge

Navigating property division under Idaho law can be complex, especially when trying to determine whether a business is community property or separate property. An Idaho divorce attorney can review your financial situation and provide tailored advice that lets you know where you stand.

Negotiation

When emotions run high, you need a third party to represent you and fight for your best interests. Divorce attorneys are skilled at helping divorcing couples reach agreements that work for them and their children as amicably as possible.

Representation

If it is not possible to come to an agreement with your former spouse outside of court, your divorce lawyer can fight for your interests in the courtroom. This involves presenting a clear case to the judge that may result in a fair division of business assets, allowing you to move forward with your business and your life.

Take Proactive Steps to Protect Your Business

At Brown Family Law, we understand that divorce is complex, challenging, and emotionally draining. When your business interests and future livelihood also hang in the balance, it can be easy to feel overwhelmed. Our caring yet tenacious divorce attorneys have seen all these challenges before and can help you navigate divorce proceedings successfully.

Brown Family Law’s divorce attorneys aim to protect your entire family’s best interests. We know your business is part of your legacy and something you may want to pass on to your children one day. So be proactive and hire our experienced attorneys to protect your marital assets, personal interests, and business.

Your journey to peace of mind starts with a conversation with a qualified Idaho divorce attorney. Call Brown Family Law at 208-987-7005 or contact us online to take the first step today.

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Danny Caine

Russell was my Lawyer at Brown Family Law. He helped me through my multiple cases after my divorce. He was very responsive whenever I had questions about my cases or understanding how the law works. Russell was respectful of how he used my retainer and always gave me good sound advice even if it wasn’t what I wanted to hear. I highly recommend his services if you’re looking for a top notch Family lawyer! 5 out of 5 stars ⭐️⭐️⭐️⭐️⭐️

Joseph Hutto

I recently engaged Andrew to review my divorce decree that was finalized in another state. He gave me excellent advice. I did not feel pressured to proceed one way or another. Instead, he gave me very reasonable scenarios to consider and allowed me to proceed down the path that felt most comfortable to me.

Natalie Warner

Clay Randle with Brown Family Law was excellent! I love the way the procedures with this company are organized. The attorney calls every Friday to check in with you so there’s no phone tag. Questions are answered very timely every week. Clay was very prompt in responding to emails. He was also great to “read the room” or the situation rather. Throughout the divorce, where grace was extended and healthy negotiation prevailed, he appeared to navigate the process in a calm and skillful way. I could see how he definitely had the capacity to respond in a more contentious, emotionally charged way if needed. He encouraged healthy boundaries with the splitting of assets and he understood both sides of what could happen if asking for a specific thing in the divorce. During a painful situation, Clay was able to crack some (tasteful) jokes and tried to keep a heavy situation feel a little less heavy. Couples seeking a divorce would be wise to choose Brown Family Law. They will be in great hands.

Dusty Boyer

I wholeheartedly recommend Andrew Christensen to anyone facing a divorce or custody battle. His passion and thoroughness as a divorce and custody attorney are truly exceptional. You’d think his name was on the firm’s door with the way he handles business—pouring his heart and expertise into every detail, even though it’s not his firm! From our first meeting, Andrew went far beyond a typical consultation, taking the time to listen, understand my situation, and craft a strategy that led to a successful outcome in my custody case. His dedication, compassion, and meticulous approach make him stand out. If you need an attorney who will fight for you like it’s personal, Andrew is the one to call!

Natalie Lewis

I absolutely believe that Brown Family Law is the best divorce attorney law firm in Utah. Attorney Ray Hingson did a fantastic job for me in a complicated divorce. He was there to guide me through the entire process. Ray touched base with me every week AND every time I called with worries or concerns. He handled things confidently and professionally. He took time to meet with me and explain everything so I could understand it. I felt like he really cared and wanted to do his best for me. His paralegal, Carren Leavitt, was also extremely helpful. All I had to do was pick up the phone and call her and she arranged a time for Ray to call me right back. She was always prompt and caring. I couldn't be happier!

natalie schaat

Anne and Josh are Fantastic!!

Libbie Duarte

I couldn’t have done it without Nathaniel Garrabrandt and the Brown Family Law truly the best experience and people to work with thank you!!

craig layton

Brown Family Law is likely the most outstanding Family Law office in Utah. They care deeply about each client, responds quickly to every client question and concerns. If anyone is in a situation of divorce and/or child custody, I highly recommend this office to assist you with your rights. They stand firmly behind their clients.

Response from the owner:Thank you, Craig.

Jeremy Newman

I can’t say enough good things about Clay Randle and Katrina Redd. They were both incredibly professional, responsive, and knowledgeable throughout my case. Their experience and advice were invaluable, and I truly appreciated their support every step of the way.

Gary Mackelprang

Daniel was patient, efficient, professional, and kind. Brown Family Law was easy to work with and very competent. Highly recommend.

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