Many high-asset divorces are complicated, but few are as difficult to navigate as those that involve a business that may be considered marital property. If you are facing a divorce and have concerns about how to protect your business in the settlement negotiations, you need to make some very difficult choices and take action immediately.
Depending on the factors of your situation, such as how involved you spouse was in the business, the length of your marriage and when the business was founded in relation to you marriage, your spouse may have a legitimate legal claim on your business as a marital asset. However, even if you did not protect your business with a prenuptial agreement, you may be able to keep it intact though the divorce settlement process.
You must act quickly to keep your family finances and business finances clearly separated, and take action to ensure that your spouse is no longer involved in the business if he or she ever was. You must also pay yourself fairly according to industry standards to not appear as though you’re keeping money from going home. It is also wise to have a professional valuation down on the business to know exactly what it is worth.
If you truly wish to save the business above all else, you may need to negotiate to keep it by offering other assets to your spouse in the divorce negotiation. Once you know exactly what it is worth, you may be able to trade other assets with your spouse to buy out his or her share in the value.
These are very broad-strokes strategies for saving a business in the absence of a written agreement, but to truly get to the bottom of what may work for you, it is crucial to get experienced legal counsel. With the guidance of an experienced attorney who understands complex assets, you can take all the necessary steps to protect the business you’ve built and weather the storm of your divorce.
Source: Entrepreneur, “How to Divorce-Proof Your Company,” Carol Tice, accessed April 21, 2017