Millions of Americans start and run their own business every year. Self-employment can be a great way to build financial security for your family as well as to maintain control over your own hours and life. However, if you are about to divorce, being self-employed can provide some unique challenges.
Any time a spouse is self-employed, determining income can be complicated. Self-employed individuals do not have a W-2 that makes it simple to see how much income that person generates. In addition, if the self-employed individual owns and runs his or her own business, an unscrupulous business owner can easily hide income through investing in the business. Accordingly, if you are divorcing someone who is self-employed and have concerns that your spouse is hiding or underrating his or her income, talk to your attorney about hiring a financial expert to examine the finances of your spouse’s business.
Similarly, if your spouse owns his or her own business, it is even more likely that you will need the assistance of a professional business evaluator. Setting a value on a business is difficult, as it includes many components such as the community’s goodwill and accounts receivable. Moreover, even if the company generates solid monthly income does not mean that the business itself is not in debt or have other issues that may detract from its actual value.
Another issue with self-employment can potentially be long or erratic hours. If you and your spouse share children, one of the main issues in determining custody and visitation is stability for the children. If your self-employment schedule means that you are unable to provide any assurance of a steady schedule that allows you to spend quality time with your children on a regular basis, successfully seeking primary residential custody of the children or even equal time with the children can be particularly difficult. If you have a varying schedule, it is important that you talk to your soon-to-be former spouse and do your best to reach a custody settlement that can be flexible with your schedule to provide you as many opportunities as possible to spend time with your children while also giving you the chance to keep working.
Divorce is often complicated, but we are ready to help you with even the most complex of self-employment or other divorce issues. Call us today for a consultation.