While no one enters into a marriage thinking about divorce, it is a very real possibility for many couples. For business owners, divorce is an especially serious topic, since they could stand to lose a great portion of their business and related assets during the process. Taking the right steps to protect your business before a divorce occurs is a must, as explained by the National Federation of Independent Business.
For people entering into a marriage with more assets, prenuptial agreements make a lot of sense. While the conversation can be a bit awkward for romantic partners, prenuptial agreements can be put in place to benefit all involved, not just the person with a greater amount of assets. Pre-nups are a financial outline of how marital assets will be handled in the event of a divorce. They can also provide instruction on what constitutes marital property. This prevents one spouse from claiming something is actually shared property when it’s not.
In the event two people have already become married, a post-nuptial agreement can be useful. Be aware that not all courts will recognize post-nups as valid. Additionally, it can be harder to enforce them in court. They often work best as an addendum to an existing agreement in the event the financial situation of the couple has changed.
There are some other steps you take during the course of your marriage. You can structure your business so that share transfers must be approved by shareholders before they can take place. You can also provide shareholders with the option of purchasing shares to prevent your spouse from becoming part owner. Paying yourself a salary can also prevent your business from being a shared property, as it keeps business and personal costs separate.