How Business Owners Handle Divorce in Tulsa

Divorce can be a complex process for many business owners, especially if a business is a large part of a couple’s marital estate. How business owners handle divorce in Tulsa often depends on how ownership interests, income streams, and business operations are evaluated under Oklahoma law.

Concerns over valuation, control, and the long-term viability of the business can have direct impacts not only on the outcome of the divorce but also on the business’s continued operation. A basic understanding of the legal issues surrounding divorce can help business owners identify risks and make more informed decisions during the process.

Hire a Divorce Lawyer

The Tulsa family law attorneys at Bundy Law have experience representing business owners, executives, and professionals in complex divorce matters involving closely held businesses, real estate, financial holdings, and other high-value assets. Aaron Bundy is the first and only attorney in Oklahoma to be admitted to the International Academy of Family Lawyers.

He is also a Fellow of the American Academy of Matrimonial Lawyers. Our firm’s knowledge and understanding of complex financial arrangements enable us to provide strategic counsel to business owners in Tulsa going through a divorce.

How Oklahoma Law Classifies Business Interests in Divorce

Divorces involving business owners often require the court to make an initial determination as to whether a given business interest is properly characterized as marital property, separate property, or both.  Under Oklahoma Statutes Title 43, § 121, courts are authorized to divide property acquired by the joint industry of the spouses during the marriage.

Even when the company was founded before the marriage, if the business increased in value during the marriage as a result of marital labor, reinvested profits or contributions from joint funds could be subject to division

Oklahoma courts do not rely strictly on the formal evidence of ownership when analyzing the nature of a business in a divorce. Rather, the court will consider how the business was operated during the marriage, with the resulting classification analysis frequently driving the decision as to whether the business is subject to division or must be dealt with in some other way.

Valuation Challenges for Closely Held Businesses

Valuing a closely held business is often one of the most contentious issues in a divorce. Privately owned companies lack an observable market value, unlike publicly traded companies. The courts typically use professional witnesses to help determine the business’s cash flow, assets, liabilities, and future earnings.

Disputes often center on valuation methodology, treatment of goodwill, and whether the income reflects true profitability. These issues become especially complicated when the business owner’s spouse has sole control over the financial records and income, especially when the income is paid through unorthodox compensation structures.

Protecting Business Operations During Divorce Proceedings

Divorce can disrupt the ordinary course of business, especially if the company is the primary source of income. Courts are often sensitive to fashioning results that do not unnecessarily disrupt the ongoing business.

If the parties are fighting over control of the company, or the party that does not own the business requires support or equitable distribution, the court can enter temporary orders, which may impact who has access to accounts, who has management authority, or whether certain assets can be sold during the pendency of the case.

A business owner must juggle the requirements of any court orders during the pendency of the case with the need to continue paying employees, meet contractual obligations, and deliver to customers. Planning during divorce can be crucial to the business’s ongoing stability.

Judicial Discretion in Dividing Business Assets in Tulsa Divorces

Oklahoma follows an equitable distribution standard and does not mandate equal division in every case. The Centers for Disease Control and Prevention reported that Oklahoma’s divorce rate in 2023 was 3.3 per 1,000 people, so the courts frequently encounter complex property division issues.

When dividing a business between divorcing spouses, the judge may consider fairness, liquidity, tax consequences, and the business’s ability to operate following the divorce.

FAQs

Does Owning a Business Automatically Complicate a Divorce?

Business ownership doesn’t automatically make a divorce complex, but it often involves additional legal and financial issues that need to be reviewed more thoroughly. When a business is involved, a court may need to look at ownership documents, the structure of income, and the means by which the business supports the household.

A relatively small business might raise questions that do not appear when only wages or traditional employment are at issue.

Can a Business Owner Be Required to Sell the Company During Divorce?

A business owner should not assume that he or she will be required to sell a company as part of the divorce. Judges usually try to avoid situations where a court order will artificially depress an income-earning asset. It is possible that the judge will consider other methods of offsetting or paying off the business’s value, such as other property or a structured payout.

How Common Is Business Ownership Among Working Americans?

Business ownership is common in the United States. The U.S. Small Business Administration estimates that small businesses account for 99.9% of all U.S. businesses, underscoring the pervasiveness of privately owned companies tied to individuals’ personal finances. In the event of a divorce, this confluence can create legal issues regarding income, property, and long-term financial viability that are not present in more traditional wage-earning scenarios.

What Kind of Challenges Does Business Ownership Present in a Divorce?

Divorces involving business ownership present an array of challenges for courts and parties in interest, especially regarding ownership interests, income streams, and the business’s continued operation. When filed in Tulsa County District Court, Oklahoma law governs such matters, with strong consideration for fairness, documentation, and real-world impacts on both spouses and the business entity.

Contact a Tulsa Divorce Lawyer

At Bundy Law, our business owner and professional clients receive representation on complex divorce issues involving the classification, valuation, and preservation of closely held businesses. Hire a Tulsa divorce lawyer to understand possible strategies to protect your long-term financial and operational interests. Schedule a consultation today.