How to Protect Your Business During a Divorce

A well flourishing business may find itself in the center of a divorce and these ranks as amongst the worst possible situations a business can find itself entangled in. The business comes under strong scrutiny with both parties trying as much as possible to escape with the largest piece of the cake. The scrutiny is a normal process because the outcome will usually carry a lot of influence in court or the divorce dialogue.

Usually, relationships are built around shared dreams and strong commitments. These make people have profound hope for a better future and a promising business may well find it ways to establishment. Then a divorce starts looming on the horizon. All that hope, excitement and commitment is disrupted. There is more uncertainty about the future and the center of attention is your children and the business.

A divorce is a life-changing stressful situation and when you factor in your business, the feeling gets even worse. Thus, you will need to have some caution for your business during this trying time to offer it better protection against the ongoing process of divorce.

The following are a means in which you can ensure your business is not left exposed to scrutiny and worse dissolution during a divorce.

Get legal advice

Divorces are common occurrences in our courts and this means it’s a dedicated area of law. Getting the best and right advice from a divorce attorney will offer you a bargaining superiority in the process of divorce. Getting a firm control on your case will mean you have a better chance of guiding the way the case proceeds thereby ensuring you are not subjected to reactions of a court order and the endless demands of your spouse.

Sign a prenuptial agreement

If your business existed before you got married you should have a prenuptial agreement signed. This means you designate the business as a separate entity owned entirely by you. In the event of a divorce, your business will not be part of the discussion and thus no sharing rights for your spouse.

Securing an early post nuptial agreement

It’s similar to a prenuptial agreement with the only difference being the time of signing. It is done after the wedding and helps define your business as a separate property especially if the divorce comes way past seven years into your marriage.

Consider making this broad move to caution your business in the event a divorce happens in the future.

Creating a buy-sell agreement

A buy-sell agreement defines what will happen in-case any of the business owner’s status changes, such as in a divorce. The agreement may limit a spouse’s influence to acquire possession, offer you a right to purchase at low and predetermined price, or deny the divorcing spouse voting privileges. The aim is to give you a competitive edge in the event your business has to be considered as a partnership between you and your spouse.

Insure your business

Insurance to your business can sometimes be the only way you get through a divorce with your business intact. A complete life insurance program can be liquidated to offer the necessary funds required to buy-out a spouse’s stake of the business.

Placing the business in a trust

The idea here is to eliminate your business from being considered as a marital property since it is to be considered you no longer own it personally. This also helps to see the business expand and grow even during the trying period of a divorce as it will never surface to be focused or discussed.