3 Ways To Protect Your Business In Divorce
The property valuation and division process can sometimes destroy a family business in the name of fairness: the business is sold or its assets are sold and the two sides split the proceeds. Reasonable people do not want this to happen. A healthy business can continue to provide profits and employment after divorce. It is also important emotionally, as a source of personal success and fulfillment.
I have compiled this list of three ways to protect your business in divorce.
1. Prenuptial Agreements Really Work
The best idea is to consider this possibility early in the relationship. Prenuptial agreements, when drawn up properly, are powerful tools in spelling out who gets what in the event of divorce. It is a good time to stipulate whether part of an already existing business, or a business that doesn’t even exist yet, is to be considered separate or marital property.
2. Incorporate Or Create A Trust
If you start a business going into the marriage, you may wish to consider a business form that removes the enterprise from marital property. Many proprietors and entrepreneurs incorporate their business to limit their personal liability and to separate business assets from the marriage. I can refer you to a business formation attorney to help you with this. The key is to incorporate prior to getting married.
3. If You Can’t Stay Married, Stay Reasonable
Neither side in a divorce wants to cause a successful family business to come to an end. Many couples, even when they are unhappy with one another, find a way to maintain a business relationship rooted in civility. I have seen numerous divorced couples decide to continue in business for the sake of the bottom line, for family members and for employees. It may be necessary to obtain the counsel of separate attorneys to protect each party’s interests.
With honest dealings and the acknowledgement on both sides of the importance of protecting the business, your Arizona business may continue to yield revenue and satisfaction.