Divorce can be a difficult and strenuous process that may lead to contentious issues along the way. Some of the issues that arise during divorce proceedings can be attributed to self-employment. In order to mitigate the risk of forthcoming divorce issues due to self-employment, it is important to consider the following:
- Ensure the protection of your assets and resources;
- Consider hiring a financial expert; and
- Think about getting a post-nuptial agreement.
It is important to maintain an accurate record of your income during self-employment. This is because a former spouse may claim that your income is much greater than it truly is. With this, you may experience financial hardship in the future since you may be forced to pay a higher amount of money for spousal maintenance and other payments to your former spouse.
Aside from ensuring that your assets and resources are protected, it may also be beneficial to hire a financial expert, such as a financial evaluator or forensic accountant. Individuals, such as these, will be able to evaluate your income documentation and may be able to testify on your behalf. Duties of a financial evaluator or forensic accountant include:
- Determining business and personal expenses;
- Reviewing tax returns;
- Evaluating discrepancies;
- Providing a business valuation assessment;
- Analyzing bank account and credit card transactions, among others.
Lastly, in order to protect yourself in divorce proceedings while self-employed, it is wise to consider creating a post-nuptial agreement if it is not too late. A post-nuptial agreement is similar to a pre-nuptial agreement, in that it allows you and your spouse to disclose previously acquired money and property belonging to you or them, as well as set rights and responsibilities that you and your spouse will assume during the marriage. A critical component of a post-nuptial agreement is that it will describe how you and your spouse will divide money and property in the event of divorce or death of one or both of you. In New York State, marital property requires equitable distribution, which refers to the division of assets and financial responsibilities. Having a prior written agreement regarding the division of assets and resources can benefit both parties to a marriage.
When contemplating a divorce, seeking the guidance of an experienced New York family law attorney may be crucial to protecting your rights and interests. The divorce lawyers at McGuire, Peláez & Bennett, P.C. are skilled in handling divorce cases and will fight zealously on your behalf. For more information or to schedule a consultation, contact our office at (631) 348-1702 or fill out our contact form.