Under Indiana’s unique property division statutes, a business or professional practice owned by either spouse might technically be considered marital property. Even when one spouse has not significantly contributed to or invested in the business, they could request a portion of its value during divorce proceedings.
Successful business owners and professionals who have their own practices may worry about unfair property division decrees. Especially in cases where their spouses also request alimony or spousal maintenance, watching for warning signs of a double dip can be critical for the financial protection of a business owner spouse.
What is a double dip?
A double dip occurs in cases where one spouse attempts to count the same income or asset more than once when requesting certain property or financial support during a divorce. Business owners and people who run professional practices are at increased risk of a double dip.
Their spouses may include future company revenue in the business valuation process for property division. They may then also try to leverage that same future revenue when they request spousal maintenance.
People can avoid this unfair arrangement where one spouse must account for the same future income twice by choosing business valuation methods that do not factor in future revenue. A proper business valuation and an uncontested settlement can both be important for those hoping to preserve their business holdings in an Indiana divorce.
Learning more about the potential challenges and pitfalls of Indiana divorce proceedings can be beneficial for those facing a high-asset divorce. Business owners and their spouses often require guidance when determining what is fair and reasonable for the purposes of both future financial support and property division, and that’s okay.