If you are facing a divorce as a business owner, you must act immediately and decisively if you want to ensure that your business can have the best possible chance of weathering this potential disaster.
Unfortunately, your business may count as marital property in a divorce settlement, depending on a number of factors that are already in play, such as when you founded the business and the role your spouse did or did not take in the business’s growth during your marriage.
The best way to protect your business from you marriage (and vice versa) is to create a prenuptial agreement that specifically excludes the business as a marital asset. You may also use a prenuptial agreement to establish exactly the terms under which your spouse may take a portion of the business in the event of divorce. In any case, a prenup keeps things much cleaner and straightforward — but if you’re reading this, then chances are it is too late to make a prenuptial agreement.
Without a prenuptial agreement or other preventative measures in place to protect your business from divorce, it is difficult to ensure the business’s survival — difficult, but not impossible.
Prioritize the business immediately
The truth of the matter is that, at this point, there are probably no magic bullets you can use to safely take the business completely off the table in a settlement negotiation. However, you can increase your odds of protecting it.
The first thing you want to do is make sure that your spouse ceases all involvement with the business. The more that you can separate your professional and private life, the better.
After you create this separation, make sure that you continue to pay yourself a reasonable salary according to your industry standards. If it looks like you are keeping your family from sharing in your income, even if divorce is on the way or currently happening, your spouse may claim that you are misdirecting funds or otherwise cheating him or her out of deserved marital assets.
You probably need to make the business a priority over all other assets if you want it to survive. However, negotiating with your assets in order to save the business is more effective if you know exactly what the business is worth. Make sure that you get a professional, neutral valuation of the business so you can some armed with accurate figures when it comes time to negotiate a divorce settlement.
Lastly, if you truly want the business to remain intact throughout the divorce, you must prepare yourself to sacrifice any or all of your other assets in order to leave the negotiation table with 100 percent ownership of the business. This means letting go of other assets you may rightfully deserve portions of, since your spouse can rightfully argue he or she deserves a portion of the business.
You and your spouse might reach a fair agreement that allows you to keep the business without exercising the nuclear option of tossing ownership of everything else, but you need to prepare yourself for the worst if you’re going to win on your own terms.
Build a strong team for strong results
If you’ve gotten this far, then you probably could use a little good news — and there is good news. You don’t have to fight this battle alone! You should not hesitate to seek out the guidance of an experienced attorney to fight alongside you, using a thoughtful, comprehensive approach to the law in order to secure the best settlement you can get.
With proper legal counsel, you can ensure that your rights remain protected while you seek to save your business from the negotiation table.