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My husband owns a business. Will any of it be mine, after the divorce?

There are lots of affluent business-owning men out there, who end up divorcing their wives. In many instances, the wife has spent many years helping to build that business.

As a CPA, a CERTIFIED FINANCIAL PLANNER^® professional, and a Certified Divorce Financial Analyst^® professional who provides divorce financial counseling for affluent women, let me try and unpack some of the implications, for you, here.

Upside, downside

If there’s a proven sustainable business in the mix (more on that in a minute), there’s a huge upside potential for your having an ownership stake in it, post-divorce. Quite simply, if it grows, it’s worth more. It generates income.

The downsides are serious, though. Depending on how the ownership is structured, you may have a passive role with no control. And you’d have to be dealing with your ex- on a regular basis. Not many divorcing women relish that prospect.

When it works, when it doesn’t

Typically, a divorce settlement in which the wife continues to own part of the business happens when the husband lacks the cash to buy her out of the business, and she agrees to co-ownership. More often, the husband will want the woman out of the picture, hoping that the business grows… without her.

This gets back to the “sustainable” part I’d mentioned above. In cases like this, you’ll need to bring in a professional called a business valuation expert or BVE, to scrutinize the business and stress-test it. After all, you don’t want to own something that’s likely to fold before you get your share.

I work with business valuation experts all the time. My role is effectively downstream, although there have been times when I’ve found lapses in their work, which has ended up saving my divorcing-women clients from future headaches—and money left on the table.

Some caveats

If the husband is the owner of a business, he’s, unfortunately, in the best position to fabricate his income—and make it look like, for example, he’s earning less than he is… so he can’t afford those pesky spousal-maintenance payments. Uggh. This is why you need that BVE, and me, to head off any monkey business.

Similarly, the business’ longtime controller or CFO may double as your husband’s personal financial planner. Do you think that they’ll act as a neutral when it’s time for divorce? Neither do I.

Last warning: Many wives have spent years in supporting roles in their husband’s businesses. This can be in accounting, marketing, or admin, or by handling the house and kids so he can focus on business growth. And while they’ve genuinely worked hard to grow the business, the sad fact is that roles like “administrative assistant” are easily replaceable. It’s a painful reality you might have to face.

The bottom line

When there’s a business looming amid divorce, things get real complicated, real quick. And you’ll want to be prepared not just for the divorce, but your financial life after divorce.

I can help you with both. Contact me and let’s talk.