As a business owner with a considerable amount of assets, there are specific things you need to consider when going through a divorce. Along with the personal and financial difficulties associated with any divorce, you must evaluate how your business may be affected. If your spouse contributed to your business’s growth or your revenues substantially increased during the course of your marriage, you likely share a significant amount of joint assets.
Even if marital and business assets aren’t co-mingled, barring a prenuptial or postnuptial agreement, your spouse is likely to still have a financial interest in your business that must be considered when dividing assets. Find out three things you can do to protect your business during divorce.
- Get a business valuation: One of the first things you should do is to obtain an up-to-date business valuation. A proper valuation is crucial for fair property distribution and it’s in your best interest to be proactive and obtain a valuation early on in a divorce. Doing so may discourage your soon-to-be ex from obtaining a separate valuation, a process that can be particularly time-consuming, expensive and, potentially, contentious.
- Remove your spouse from operations: If your spouse has an official title or position, remove him or her as soon as you can. The longer your spouse contributes to business operations, the greater likelihood that he or she will be entitled to a larger share of business assets.
- Utilize other marital assets: If you are particularly concerned about the state of your business, you may want to consider offering your spouse a larger share of other marital property and assets in a settlement agreement. For example, you can negotiate more of your retirement plan, stocks, or real estate to retain more control over your business and its assets.
Going through a divorce with significant business assets can be scary. For more guidance on how to safeguard your interests, consult with an experienced divorce attorney.