Divorce is stressful enough without considering how it may impact your business. If you are the sole proprietor of your business, the reality is that your divorce can directly impact the business itself. For example, if you have to sell assets to pay for alimony or child support, that could affect the cash flow of your business. If you own a partnership or corporation, then your divorce could potentially impact your ownership stake and ability to make decisions about the business. Lastly, if you are going through a contentious divorce, it could negatively affect employee morale and productivity.
What can I do to protect my business in a divorce?
If you are worried about how your divorce will affect your business, there are some steps you can take to protect it. First, if you are the sole proprietor of your business, you can keep your business and personal finances separate to make it easier to track and value assets. You should also have a buy-sell agreement in place with your spouse so that if one of you wants to sell the business, the other spouse has the first right of refusal. Lastly, consider using a mediator or collaborative divorce process instead of going to court, as this can help reduce conflict for everyone involved.
Will the court divide my business?
If you own a business, the court may choose to divide it in the divorce as an asset. The court will consider several factors when making this decision, including the length of the marriage, each spouse’s contribution to the business, and whether one spouse will be able to continue running the business after the divorce. If the court does decide to divide your business, they may give it to one spouse outright or order that it be sold and the proceeds split between both spouses.
The role of the lawyer in protecting businesses during a divorce
A lawyer can help protect your business during a divorce in several ways. First, a lawyer can help you track and value your assets. A lawyer can also help you draft a buy-sell agreement and assist with negotiation and mediation efforts to try to reach an amicable resolution outside of court.
If you are going through a divorce and own a business, it is important to seek out legal assistance to help protect your interests.