Get a prenuptial agreement. Sure, its not very romantic to
contemplate divorce before you even marry, but if you own a
business its your responsibility to think about the possibility.
Speak openly and honestly with your intended about your desire to
keep your business separate from the marriage, and craft an
agreement that is fair and prudent for both parties before you have
any reason to be contentious.
Keep your family assets separate from your business assets.
This is just common business sense, but its even more important in
the event of a divorce. If you are using family money to fund your
business, you are creating a situation where your spouse may have
claim to some of your companys equity.
Pay yourself. Similarly, if you are not taking a salary, or
taking a salary that is less than the going rate for your line of
work, your spouse can claim that you have taken assets that
rightfully belonged to your family and put them into your
business.
Dont involve your spouse in your business. Again, this sounds
cold, but there are sound business reasons for keeping your spouses
involvement in your business to a minimum.
Create a Property Settlement Note. This will outline in advance
how your spouse is to be paid out for their share in your business,
should your marriage be dissolved.
Put your business and its assets in a trust. This will protect
the assets from divorce, as you will no longer technically own
them. The trust becomes, in effect, the owner of the business, and
not only its current assets but also its future growth will remain
outside the parameters of your marital assets.
Trade your share of the marital assets for equity in your
business. This is only relevant if you are already going through a
divorce, but it can help keep your business intact. You can
maintain your share in the business by trading off other assets
that are less important to you.
Sell equity in your business to raise capital to keep it
running. Not an ideal solution, but if you can convince investors
to buy shares of your company, you may be able to pay off your
spouse while maintaining your business functions.
Split the business. This is the least desirable course of
action, as it either means that you will have to continue your
relationship with your ex in a business context.
If you are a business owner concerned about protecting your
businesseither proactively, or in the event of a divorce or other
life-changing eventcall us for a free consultation at 856-227-7888
or contact us at [email protected] .com.
