When you start researching high-asset divorce, you may run into legal and financial jargon that sounds confusing. One term that causes significant concern for business owners is "double-dipping." It sounds technical, but the concept is simple: it’s the unfair practice of being forced to pay for the same asset twice.

Here’s a simple way to think about it: Imagine you buy a car from someone for its full value. Then, a month later, they demand you also pay them a fee for the "driving enjoyment" you get from that car. You would rightly argue that the value of that enjoyment was already included in the initial price. You shouldn't have to pay for it a second time.

In a divorce, this can happen with a business asset. The process typically looks like this:

1. First Dip (Asset Division): Your business is valued as a marital asset. A significant part of that valuation is based on its ability to generate future income. As part of your settlement, you "buy out" your spouse's share of the business value, often by giving them other assets of equivalent worth. In effect, you have already compensated them for their share of the business's future earnings.

2. Second Dip (Spousal Support): Next, the court calculates spousal support. This calculation is based on your income—which is the very same income stream generated by the business you just "paid for" in the asset division.

The result of “double dipping” is that the same dollar of future business income is used once to value the asset your spouse receives a share of, and a second time to determine the support you have to pay them. This is double-dipping, and it is a fundamentally unfair outcome that can cost a business owner hundreds of thousands of dollars.

Avoiding this requires sophisticated legal arguments and a meticulously structured settlement. An experienced legal team will know how to properly frame business assets and structure an agreement that ensures assets are only counted once. This can protect your cash flow and may prevent you from being unfairly penalized.

Understanding the basics is the first step, but protecting your life's work requires a detailed strategy. To learn the 5 critical mistakes business owners make during a divorce and how to avoid them, download our free guide: The Executive's Playbook: How to Protect Your Business and Your Wealth in an Ohio Divorce.