Protecting Your Family And Future

  1. Home
  2.  » 
  3. Divorce
  4.  » Business owners face unique challenges during divorce

Business owners face unique challenges during divorce

On Behalf of | Apr 2, 2020 | Divorce |

Couples who choose to divorce all face some difficult decisions, no matter what their circumstances. However, most couples do not include business owners, who may face some conflicts that others never need to consider. When a business owner gets divorced, the business may experience significant impact, and the owner must take this into consideration as they build their divorce strategy.

If you are a business owner with divorce on the table, it is possible that your business qualifies as marital property. Many business owners make it a priority to keep their business separate from their personal finances, and may have protections against divorce. Other owners may need to consider their priorities carefully, to ensure that they emerge from divorce with a clear path forward. Be sure to make a strong divorce strategy to guide you through the divorce process and keep your rights secure along the way.

Protections against divorce inclusion

Many couples choose to create prenuptial agreement to protect each other’s personal property from creditors and potential divorce. If you have a prenuptial agreement, now is the time to review it carefully. Your agreement may identify your business as protected personal property, in which case it is wise to scrutinize the agreement to make sure it is legally sound. You may not need any further protections, if you have these protections already in place.

If you do not have a prenuptial agreement, it is still sometimes possible to claim that a business is personal property and marital property. To make this claim, it is important to demonstrate that your spouse has little or no involvement in the business. Typically, the more involvement that your spouse has in the business, the more difficult it is to qualify the business as personal property.

Protecting your business from property division

In some cases, it is not feasible to exclude a business from a divorce. However, you may still have opportunities to keep the business intact until the divorce finalizes. If keeping your business afloat through your divorce is one of your top priorities, then you may need to begin taking stock of your assets and considering which you are willing to sacrifice.

If your spouse has a claim on a portion of the value of the business, it is wise to consider a professional business valuation. This creates a comprehensive understanding of the value of the business, so that you and your spouse can negotiate fairly.

If you have sufficient assets, you may be able to offer your spouse assets in exchange for their expected portion of the business’s value. If these are not available, you may be able to reach a structured payment plan to compensate your spouse over time.

Each business owner faces different struggles during divorce, so it is important to build your own personalized divorce strategy. With a clear understanding of your priorities and the tools you have available, you can keep you rights secure while you fight to protect your business.