We often discuss property division in this blog, as it can be one of the most frustrating and upsetting issues that couples face in the event of a divorce. After all, money can mean security after a split.
Generally speaking, property division can be done in a straightforward manner. Spouses will itemize and calculate the value of all their shared debts and assets and then split that sum equally. However, this process can get very complicated when there is a business involved.
When a spouse owns a business or both spouses start a business together, the value of that business will likely become an issue when dividing assets in a divorce. We have discussed this subject in an article on our website where we noted that a study reported that over half of all business owners have not taken adequate steps to protect a business from being negatively impacted by a divorce.
Readers should know that there are many ways to protect a business, and it can be fairly uncomplicated to pursue these remedies before, during or after a divorce with the help of an attorney.
Before getting married, a business owner can define ownership in a prenuptial agreement or form a trust or LLC to keep company assets separate.
During a marriage, business owners can protect their separate property by avoiding co-mingling of assets if the business was started before the owner was married. Couples can also create documents to clearly define ownership should they decide to start a business together.
After a marriage has ended and a couple is divorcing, there are still ways business owners can shield a company from being damaged or dismantled in a divorce. Divorcing spouses can negotiate buyouts or secure an accurate valuation of the business and pay out money to one or both spouses. It may also be possible for two people to continue a business relationship and run the business together, with clear boundaries, of course.
Whether a business exists or is being started, it is important for owners to understand the stakes of what can happen if they get married or divorced. Discussing the options and potential remedies with an attorney can be a good way to protect a business and the financial future of owners and spouses.