Divorce will bring an array of emotions. For some people, divorcing a spouse will be a joyous time, as exemplified by one Texas woman who used the occasion to blow up her wedding dress.
For most people, divorce will bring stress, especially if you own a business. If you are not careful, your former spouse could end up with half the company, which can seriously jeopardize operations. All business owners should follow certain steps before, during and after their marriage to protect these assets.
Offer to “buy out” your spouse
An ex may go after a business because he or she knows there is a lot of money to potentially gain. When your company is important for you, it may work in your interest to offer your spouse something else. For example, if your business is more important than retaining the family house, then you could offer your spouse the home in lieu of any controlling interest of the business. It could be enough to satiate your ex.
Make sure you get a prenup
In the event you started your own business prior to the marriage, you should absolutely get a prenuptial agreement. You want to protect your business’ interests because you never know what may happen in the future. Business owners who failed to get a prenup may want to consider opting for a postnuptial agreement after marrying. A well-drafted agreement will hold up in court so that you do not have to worry about the well-being of your company.
Form a trust, LLC or corporation
You can protect your business assets by developing the company as a corporation or LLC. With these distinctions, you legally create a business that is a separate entity from yourself. You can do this even if you are the sole owner of the enterprise. You can further help your case if you make sure you never intertwine marital assets with the company. For instance, you would not want to ask your spouse for his or her personal funds to go into the business.