Division of Business Assets in Divorce in Rhode Island

Divorce is never easy—especially when your hard work, livelihood, or family business is on the line. If you’re facing the possibility of divorce in Rhode Island and own a business, you may be feeling overwhelmed by questions.

Some of these might include: What happens to the company? Will everything you’ve built be at risk? How do you protect your future and those who depend on you?

At the Law Office of Susan T. Perkins, we understand just how heavy this experience can be. With over 20 years of experience helping clients just like you, our mission is to guide you through each step with clarity and compassion.

We put together this guide to walk you through how business assets are divided in Rhode Island divorces, what to expect, and how working with an experienced, caring attorney can make all the difference.

Step 1 – Determining If the Business is Marital Property

One of the first questions people face in a Rhode Island divorce is whether their business is considered “marital property.” Rhode Island law typically treats assets acquired or grown during the marriage as marital—even if only one spouse is listed as the owner.

There are, however, important exceptions. If your business was started before the marriage, inherited, or maintained separately from family finances, the court may handle it differently.

This step can significantly impact how the business will be divided. Understanding where your business stands under the law helps you prepare for what’s next, and more importantly, makes it easier to fight for what’s rightfully yours.

Are Business Profits Earned During the Marriage Considered Marital Property?

In most Rhode Island divorces, profits earned by a business during the marriage are typically considered marital property—even if only one spouse was actively involved in running the company.

This means that increases in value, reinvested earnings, or even distributions paid out while you were married may be included when dividing assets.

The idea is that both of you contribute to the economic partnership of marriage, whether directly or indirectly. So, even if one spouse wasn’t part of daily operations, the profits and growth of a business during the marriage are usually subject to equitable division.

There can be exceptions, such as if a valid prenuptial agreement specifies otherwise, or if the business is proven to be entirely separate property.

Step 2 – Valuing the Business

Once it’s clear that a business (or a share of it) is marital property, the next step is determining its value. Business valuation is an essential part of the divorce process, and it’s rarely as simple as looking at a balance sheet. Factors like company assets, debts, revenue, market position, and even future earning potential can all come into play.

Getting a reliable business valuation is important because it’s the best way to guarantee you receive a fair share. This is a detail-oriented process, and often requires input from accountants, appraisers, or other financial professionals.

Can Each Spouse Hire Their Own Business Evaluator?

Yes. In Rhode Island, it’s common for each spouse to hire their own business valuation expert, such as a certified appraiser or forensic accountant. If the two experts reach different conclusions, the court may review both opinions or appoint a neutral evaluator.

Step 3 – Dividing the Business: Approaches and Outcomes

After the business has been valued, the focus shifts to how it should be divided. Rhode Island follows equitable distribution, meaning marital assets are divided fairly, though not always equally.

This results in the court weighing several factors, such as each spouse’s contributions to the business, their financial needs, and the practicality of splitting or selling the business.

There are several ways to handle division. The approach depends on the type of business, how involved each spouse was, and what makes the most sense for both parties moving forward. For more details, see the Rhode Island Judiciary’s guide to divorce.

Is a Buyout Required if One Spouse Wants the Business?

A buyout is a common solution if one spouse wants to keep the business. The spouse who wishes to retain ownership pays the other their share of the business’s appraised value, either as a lump sum or over time.

However, a buyout isn’t always required. If a buyout isn’t possible or practical, the court may consider other options, such as selling the business, splitting proceeds, or awarding other assets to balance the division.

Creative solutions are often needed, and an experienced attorney can help you explore what works best in your situation.

Step 4 – Legal and Financial Considerations

Dividing a business is more than just splitting the value. Rhode Island courts require thorough financial documentation, including business tax returns, profit-and-loss statements, operating agreements, and more.

Both of you, with your respective attorneys, may need to gather, share, and review a range of financial records to ensure the process is transparent and truly fair.

It’s important to be organized and honest from the start. The court has the authority to issue subpoenas for missing documents or bring in a forensic accountant if there are concerns about hidden assets or unclear finances.

What Documents Are Needed to Divide a Business?

You’ll likely need to provide:

• Business tax returns (from the past few years)
• Financial statements
• Balance sheets
• Shareholder agreements
• Partnership agreements
• Payroll records
• Business licenses
• A detailed list of assets and liabilities

The court may also want to see contracts, loan documents, and client lists. Having these documents ready helps keep your case moving and reduces the risk of costly delays.

Step 5 – Protecting Your Business Before and During Divorce

For business owners, thinking ahead can make all the difference. There are steps you can take—both before and during a divorce—to help protect your company and your interests.

Strategies include keeping business and personal finances separate, maintaining clear records of ownership and contributions, and establishing formal agreements among business partners.

Legal agreements such as prenuptial or postnuptial agreements, buy-sell agreements, and thoughtful corporate planning can help reduce stress and uncertainty if divorce arises.

Are Buy-Sell Agreements Effective in Divorce Cases?

A well-crafted buy-sell agreement can be very effective in clarifying what happens to a business interest in the event of a divorce. These agreements can outline valuation methods, buyout terms, and restrictions on transferring shares.

However, Rhode Island courts still have the final say and will review these agreements to ensure fairness under the law. Having these safeguards in place can help prevent future disputes and keep your business running smoothly.

Step 6 – Next Steps and Getting Help from an Experienced Rhode Island Divorce Lawyer

No one plans to face divorce, and certainly not when it involves a business you’ve worked so hard to build. We know that every decision you make now feels especially important—because it is.

The future of your business, your financial stability, and your sense of peace all deserve careful protection.

At the Law Office of Susan T. Perkins, we’re here to help you navigate these decisions with clarity. You don’t have to figure this out on your own, and you don’t have to settle for uncertainty about what happens next. With the right support, you can protect what matters most and move forward with confidence.

If you’re worried about how your business assets will be affected by divorce in RI, reach out today. Call 401-PERKINS to schedule your free consultation.