The decision to get a divorce is emotionally difficult, but it also has practical implications and potentially negative impacts on the parties’ futures.
Because Louisiana is a community property state, courts consider all assets within a marriage to be joint. This includes property, financial and business assets unless a party can prove ownership of separate property.
Understanding community property
Marital assets include everything a couple acquires during the marriage. Exceptions include legal compensation awards, inheritances or gifts meant for an individual, not the couple. When divorcing couples cannot agree on the details of asset division, they must sell community property and divide the proceeds evenly. If you started your business before the marriage but increased its value during the union, then its equity is also community property and subject to division.
Maneuvers to protect your company
While it is best to make protections for your company before you get married, it is not always possible, especially if you and your spouse worked together to found and build the business. For the best chance at keeping your business in a Louisiana divorce, there are some strategies you can implement when you realize your split is on the horizon:
- Compensate your spouse fairly for his or her work, or remove him or her from an active role in the company
- Pay yourself a reasonable salary to prevent your spouse from claiming a significant role in supporting the business
- Negotiate to keep control of the business by offering up other valuable assets to your soon-to-be ex
When thinking about getting a divorce, it is important to understand your rights under Louisiana family law and how your split can affect your business.