How to Prepare Your Business for Divorce If You are Self-Employed

When you're self-employed, you can prepare your business during the divorce, and a number of ways before you actually begin the divorce process. The first thing you wanna do is you wanna identify whether it's community property or separate property. Which means you need to look at when did you form your business? Was it formed prior to the marriage? Or was it formed during the marriage? If it's formed during the marriage, then you have an issue with a community property asset that's gonna be divided. So once you've identified whether it's a community property or separate property asset, you wanna start looking at your formation documents and gathering those together, because that will help you identify what type of entity you have. The third thing you wanna do is you wanna look at the books, you wanna make sure your books are in order. You wanna make sure that your profit and loss statements, your balance sheets that they're all current and up-to-date. You wanna make sure that your accounting has been done accurately and well, and the reason being is that it is likely that your business will have to be valued. You're gonna have to know how much is that business worth at the time of divorce? Not in the future, not in the past, but at the time of divorce, what is the value on that? Because once you identify that value and you've identified your interest, now you know what you have to put in your line item when you start dividing the marital estate.

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