September 16, 2016

LLCs and Divorce

My husband and I are business partners, and we also have some real estate. Our business is an S corporation, but my husband insists on getting everything under an LLC corporation, so far our relationship is fine, but we had divorce attempts in the past, so i would like to know if doing these changes will affect me in the event of a divorce.Thanks!

Answer

Divorce and ownership of assets is extremely complex, and the law is state specific (community property vs. non-community property states and so forth).

As a general rule, the titling of assets acquired during the marriage does not affect property division in the event of a divorce. Changing the titling of assets acquired PRIOR to marriage (e.g. separate, non-marital property) can convert separate assets into marital assets. Therefore, it matters when these business assets were acquired.

You will need a local attorney on this one.

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