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While a divorce may be an emotional decision, that doesn't mean it comes without financial considerations. And those considerations can be significant if you're self-employed. Your time and your bottom line may be stretched pretty thin as it is -- how will the added emotional and dollar expense affect your clients and your business?
Here are a few things to think about if you're considering a divorce while you're self-employed:
Optimizing Your Options
There's no one-size-fits-all divorce. And if you're self-employed, you're probably used to thinking creatively. There are alternatives to a traditional divorce, including summary dissolution, legal separation, mediation, and a collaborative divorce. And while there is no magic solution to making a divorce fast, cheap, and painless, knowing and choosing the option that's right for you and your soon-to-be ex can reduce the negative side effects both for you and your enterprise.
Obviously owing alimony or spousal support after a divorce is going to have an impact on your finances. And if you're self-employed, that could mean less of your income making it into your bank account. Then again, depending on how successful you are in relation to your spouse, you could be the one receiving alimony.
Courts generally have broad discretion in determining whether to award spousal and, if so, how much and for how long, and will consider each party's age, financial condition, and standard of living during the marriage when setting an amount. But keep in mind that court-ordered spousal support orders can be modified over time, and you and your spouse can create your own spousal support agreement.
Managing Marital Property
Not only will you be splitting your finances in a divorce, but property as well. So it can be vital for you to identify any and all marital property used for your self-employment. That doesn't guarantee you will receive that property after the divorce, but it may increase your chances of keeping your business going during the divorce and beyond. The rules regarding the division of marital property (and what even classifies as marital property) can vary depending on where you live, so make sure you're careful in your record-keeping and distinctions between general shared property and property essential to your self-employment.
Divorce can be a complicated process -- emotionally, financially, and legally -- so make sure you've got an experienced divorce attorney on your side.