If you are a business owner, there are many things you must think about every day. Have you ever thought about what would happen to your business in a divorce, though?
If you and your spouse manage a family owned business together, your company may be facing jeopardy in the event of a separation. If your entire net worth as a couple is tied up in your business, your financial health can be completely ruined, leaving you with an insufficient amount of cash to buy out one another.
It’s possible you will be forced to keep your business running, depending on the circumstances, something that is often not an option when a divorce happens on bad terms. You can also choose to entirely shut down the business and split up any assets, or split the price of selling the business.
There are some ways around this, though, with options to protect the business.
Start your marriage with a prenuptial: a prenuptial can be done before you marry to determine what happens with your business in the case of a divorce. This can protect your company from laws own property division. You need to make sure your prenup is in a written document, executed voluntarily in front of witnesses, and both spouses have full disclosure.
Create a trust for the business: by creating a trust, the next generation in your family will be protected if they go through a divorce. When the business is put into a trust, and the trust is put in the child’s name, the spouses never allowed to touch the money, even in a divorce where other property is divided.
Become co-owners of the business: you can remain a co-owner with your spouse even after your marriage is dissolved. Of course, this is easier said than done. Most couples don’t want to be left having to see the other, much less continue in business with them. If you divorce on amicable terms, though, you should consider this as an option.
If you have a business and are in the process of divorcing your spouse, your best option is to get a divorce lawyer. That way, you can make sure your business and your finances stay healthy.