Running a single-truck owner-operator business may be small potatoes compared to typical American corporations, but that doesn’t mean it’s a simple arrangement. Consequently, when a married owner-operator gets divorced, there can be financial and legal complications.
“The biggest issue we run into in cases like that is from the tax side,” says Todd Amen of Denver-based American Truck Tax. “Inevitably, they will both try to claim dependents as deductions.” This problem crops up in many divorces, but it’s more common in an owner-operator family because the couple has usually turned tax matters over to an accountant.
Who’s listed on the truck note. In a typical financing arrangement (not a lease deal with a carrier), both spouses are listed, Amen says. “If it’s the husband’s business, but the wife is still on the note, and she no longer has anything to do with it, she has to worry about him making truck payments,” he says. On the other hand, come April 15, she can legally take advantage of depreciation and interest payments – a point the husband would object to because she’s no longer an active part of the business.
Handling the double-whammy of divorce and bankruptcy. In most cases, it’s best to settle the financial matters first. “At least you’ll have a clear picture of what you have and don’t have for a divorce judge to dole out,” Amen says.
Staying together for the sake of the business. It’s not often an option, for obvious reasons. When feasible, especially with team drivers, it’s worth considering. “A wife who drives is really valuable,” Amen says. “You can cover your fixed costs a lot faster. You get double per diem (meal) deductions.”
If you’re thinking about getting hitched, have your accountant review your business structure to see whether you should change it. A prenuptial contract might resolve some concerns about things not working out.
Likewise, if it’s time to unhitch, make sure you understand how it will affect you, your spouse, your tax liability and your business.