Whether you are happily married or you see divorce on the horizon, there is a tiny worry in the back of your mind about the fate of your business. You know that owning a business usually means sharing it as a marital asset that is subject to division in a divorce.
When you undergo a divorce case, there is a very real possibility that your business will no longer be whole and functional after dividing it with your spouse. For that reason, you should start taking steps to divorce-proof your business as soon as possible.
Get a professional business valuation
When a certified appraiser values your business, they take into account all relevant finances, real estate and other assets to arrive at the company’s true worth. An accurate appraisal can be a valuable negotiation tool to help secure your interests in a divorce.
Separate your business from your marriage
The sooner you structure your business as an entity separate from your marriage, the fewer assets you will have that count as marital property. You might accomplish this by establishing your company as an employer that pays you a regular salary.
Sign a postnuptial agreement
If you are in a marriage without a prenuptial agreement, it is not too late to protect your business and other assets through the use of a postnuptial agreement. Depending on the nature of your marriage, you may have to make certain concessions to your spouse to secure their agreement in allowing your business to go untouched in the event of a divorce.
While some divorce arrangements rule that a spouse maintains a stake in the business after a divorce, there is also the possibility that you will have to sell your business and split the proceeds. Protect your business by planning ahead now.