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Tips on Protecting Your Business from a Divorce

Whether you are already married or are about to walk down the aisle, if you own a business, you need to know how your company could be affected in case of a divorce and how to protect business assets from a split. Here are the steps to take if you are:

Getting married and own a business – whether or not you live in one of the nine community property states, a prenuptial agreement is a must for business owners who are getting ready to walk down the aisle. Experts advise getting a prenup at least six months prior to the wedding date to nullify any potential claims of duress. If you live in an equitable distribution state (like Florida), the prenup should outline the division of business assets based on how involved each spouse is in the business. In community property states, a prenup should detail who gets what in the event of a divorce.

Already married and starting a business – get a post-nuptial agreement, which acts the same as a prenuptial agreement but is executed after the marriage.

Married without a prenuptial agreement – consider getting a post-nuptial agreement, even though it means you will need to disclose all your business financial information, including details you may not have already shared with your spouse.

If you did not sign a prenup or a postnup, there are still things you can do to protect your business, including:

  • Have a professional valuation done of your business right before the wedding.
  • Make sure you keep good financial records.
  • Don’t funnel personal expenses through the company.
  • Do not mix personal and business finances.
  • Don’t borrow from your personal accounts to fund the business.
  • Limit distributions from the company.
  • Pay yourself a competitive wage so your spouse cannot claim there is more for him/her.
  • Keep your spouse from working in the business so he/she will not be able to assert that they were key to the growth of the business.
  • If a divorce is looming, give up other assets like property or vehicles to keep the business.

The Dorcey Law Firm, PLC, provides business planning services to Florida business owners. Contact our Fort Myers law firm for your free consultation.

Categories: Estate Planning, Business Planning
dorcey law firm
The Dorcey Law Firm, PLC - Fort Myers Attorney
Located at 10181 Six Mile Cypress Pkwy, Suite C, Fort Myers, FL 33966
Phone: (239) 330-6674
Local Phone: (239) 418-0169
Website: http://www.dorceylaw.com
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