Protecting your business in divorce may require sacrifice

On Behalf of | Feb 17, 2017 | Prenuptial Agreements |

Protecting your business in a divorce is never a simple matter. In the eyes of the law, a marriage is as much a business relationship itself as a personal one, and can make any further business ventures quite complicated when it comes time to split. Of course, the most effective way to protect as business from a marriage is to create a prenuptial agreement that addresses the issue beforehand. However, for many business owners, the dream doesn’t take shape and get off the ground until well after the marriage is underway.

So what is a business to do? If you choose to try to divide it as a marital asset, the whole thing may go under. If the business is not terribly lucrative, or does not have many assets, that may be a reasonable risk. However, the larger the business and the more parties who are involved, the more that it becomes a beast all its own. After all, no one wants to tell employees that they are now out of a job because their boss’s marriage didn’t go the distance.

While it may not be the easiest solution, one legitimate possibility to consider is negotiating an agreement to remain mutually vested in the business with your spouse after the divorce. Will this leave you open to frustrating emotional situations? Possibly, but it may be a reasonable price to pay for keeping your business afloat.

If you choose to attempt this course of action, it should be done with careful legal guidance by a qualified professional who can help you devise a plan that allows for either party to buyout the other if the arrangement becomes untenable. With proper legal guidance, you can create a sustainable plan for the future that grants everyone something they value, while protecting your rights and keeping your business from being divided up like so many other assets in a settlement negotiation.

Source: MarketWatch, “How to protect your family business during a divorce,” Daniel Thompson, Feb. 10, 2017