Divorce and Self-Employment

Facing a divorce in Massachusetts where one party is self-employed? Here are some tips and frequently asked questions that may apply to your case.

Top Considerations for Divorce Cases with Self-Employed Spouse

Some of the initial considerations when a divorcing party is self-employed are the following:

WHAT INFORMATION IS IMPORTANT? In all Massachusetts divorce cases, information-gathering is critical. This is especially important for cases involving a self-employed spouse, primarily because the owner-spouse is in control of the information relating to the business finances. It is critical that a party seeking information about the business should have the tax returns for the business (as well as personal), bank account statements, internal business records such as payroll reports and tax forms, financial ledgers including electronically stored and cloud-based data such as Quickbooks files, and other relevant accounting records. If the business deals in cash, having real-time records of cash in/out is critical.

HOW IS A BUSINESS VALUED? In Massachusetts, divorcing parties often litigate the value of the business for asset division purposes. This is true because one party normally will prefer to retain the business and “pay” the other party for their marital interest. The court can also order a business sold in a divorce proceeding. If a business is valued, the court will apply the appropriate case law and listen to expert testimony to arrive at a value. The link above provides a detailed explanation of the relevant case law and chronology of proceedings for business valuations in divorce.

HOW DO I CHOOSE THE RIGHT DIVORCE ATTORNEY? In Massachusetts, there are myriad of divorce attorneys. Many have the requisite experience and knowledge to adequately represent a party in a divorce case where a party is self-employed. Our firm has extensive experience litigating these types of cases, and a brief call with one of our partner attorneys will be well worth your time. Contact us today. It may be important to act quickly.