When you are a business owner, divorce can put your business at risk. You may have to give up partial ownership or pay your spouse a significant amount of the business value. So how can you make sure your business stays protected?
Part of protecting your business starts with planning. Whether you started your business before you married or after, there are steps you can take to make sure that your business stays healthy after your divorce.
Keep your business separate
Protecting your business starts with how you run it. When you first set up the business, you should be the only person listed as an owner. Keep track of any money you use to set up the business, especially if you start it before you get married. And as you earn money, keep business money separate from personal money. The more you separate your business from your marriage, the easier it is to get a fair value of it during divorce.
Prenuptial and postnuptial agreements
You can also choose to sign a legal agreement that makes sure your business stays separate from your marriage. If you started your business before you married, you and your spouse can sign a prenuptial agreement that explicitly states how you will treat your business in divorce. The agreement can keep your business separate from marriage. Or you can choose to give your spouse a certain percentage of the value.
If you start a business after marrying, you can also sign a postnuptial agreement. Just like a prenuptial agreement, this establishes rules for how you treat your business in divorce.
You have worked hard to grow your business to where it is today. Planning ahead can make sure your business stays safe even if you go through a divorce.