Did you know that the divorce rate for first marriages in the United States is 41%?
The majority of couples (around 59%) may never get divorced. But as these statistics show, there’s about a 50/50 gamble when it comes to staying married.
Of course, there’s a lot at stake when a married couple decides to go separate ways. One major thing at stake could be a business you own or own with your partner.
Knowing how to protect your business from a divorce is vital. Divorces can get messy. It’s not uncommon for one partner in a splitting marriage to go after the other’s business. Or, it could be the case where a couple are both married and business partners.
Even if you’re not married or are in a happy marriage, it’s still good to prepare ahead of time. To learn how to divorce-proof your business, read on!
Limit Your Partner’s Involvement in the Business
It’s not uncommon for a partner to hop on their significant other’s business. After all, some couples yield more success when working as a team. But before you ever consider bringing your partner on board, know that the legal route is the safest.
The best way ever to protect your business from a divorce is to only ever go into business with those you trust. Someone whose trustworthy will respect you and your business collectively. If the time ever comes to part ways as a married couple, they’ll respect the business as your own.
If you started the business with your partner, they’ll also respect the fact that the business is a 50/50 deal. A trustworthy partner is also someone who is willing to discuss worst case scenarios.
Should you decide to bring them on board, limit their role in your business as you see fit. Both of you should agree to their role in writing and with a lawyer present. This will help ensure that there are no messy disagreements when it comes to the rights of the business.
If you have other partners or shareholders, create a buy-sell agreement. This will allow your business partners and shareholders to buy company shares. And it allows them to do so before your spouse gets the opportunity should they go after your company in a divorce.
Create a Prenuptial Agreement
A prenuptial agreement is a surefire method for protecting assets from divorce. This type of agreement functions as a contract. It ensures the protection of your assets should you and your partner go separate ways.
If you decide to create a prenuptial agreement, be sure to explicitly write out your business as an asset. Once your partner signs, they won’t be able to go after your business.
You should formulate and work out the logistics of the agreement with a lawyer. The laws regarding prenuptial agreements vary from state to state. With a lawyer, you’ll make sure your prenuptial agreements contains no loopholes.
When the time comes to sign the agreement, make sure there are witnesses present. You can also have your partner sign the prenuptial agreement in front of a notary. This will prevent your partner from ever claiming that you coerced them into signing.
Invest Some Your Income into the Household
So often business owners invest the majority of their money back into the business. But by doing this, you create a sticky situation for yourself should you ever get a business divorce.
Throughout your marriage, be sure to invest some of the money you make back into your household. Not only do you deserve to give yourself a salary. This will protect you should your partner ever claim that they never received a fair share.
Lawyer Up If You’re Getting Divorced
Some couples are able to divorce peacefully and quickly with the help of a mediator. But a large portion of divorcing couples are not able to work matters out together. Often these couples get their own lawyers and work out the conditions of the divorce in court.
Protecting assets from divorce, whether it’s property or a business, is crucial. Without a lawyer, you’ll have an extremely hard time doing this.
But not every divorce lawyer is the same. Some lawyers are more experienced in divorce cases than others. Others may not have the background to handle a divorce where one of the assets at stake is a business.
Are you finding yourself in the beginning or middle of a divorce at present? Are you wondering how to protect your business from a divorce?
If so, look for a lawyer who has helped people in your same situation. Not only should you vocalize and make your needs and concerns known from the get-go. Ask to see their references, talk to past clients, and read about past cases.
There are certain procedures and consequences when one partner fails to show up in court. These vary on a state-by-state basis. If you’re located in Tennessee, you can view here to learn more about default lawyers in your area.
Don’t Forget a Post-Nuptial Agreement If You Ever Finalize a Divorce
As you move closer to finalizing your divorce, it will help to have a post-nuptial agreement ready to sign.
A post-nuptial agreement is a contract that essentially reinforces a pre-nuptial agreement. It functions as a settlement of the terms of a couple’s assets. It also functions as an official acknowledgment. It differentiates assets and the respectful owners of those assets.
You can sign one right after you get married. But you should be sure to sign it before you finalize a divorce. Again, be sure to always sign any agreement or contract in front of witnesses.
Understanding How to Protect Your Business from a Divorce
Getting a divorce is one of life’s most stressful events. And if you own your own business, a divorce is an even more challenging situation to deal with.
By understanding how to protect your business from a divorce, you can prevent a messy divorce. With these tips, you’ll be able to successfully divorce-proof your business. And you’ll make sure you’re entitled to what’s yours – no matter if you stay married or ever get divorced in the future.
There are plenty of other legal situations that pertain to you and your business. To learn more, visit our blog today!