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How can you protect your business assets?

| Oct 27, 2020 | High-Asset Divorce |

When your marriage ends in a divorce, a lot of assets are at stake. This includes your personal business assets. If you own a business, you have to take into consideration what will happen to your business and its assets.

Forbes points out that fair distribution is still important but you can take steps to ensure that it is fair.

Do you have a postnuptial or prenuptial agreement?

The difference between a postnuptial agreement and a prenuptial agreement is that you sign a prenup before you marry your spouse and you sign the postnup after the wedding. In these documents you can outline the value of your business and how to divide those assets. The contract can state that your business is separate property or that the value prior to your marriage is separate. You can include specific percentages on how to divide business assets.

For equal partnerships, the contract can include which spouse should buy out the other. In some cases, it may even state that the two of you will continue to work as partners.

What if you do not have a contract?

Without a contract, you can still set yourself up as the sole owner of your business. You can make it clear, in writing, that there will be no business transfer in the case of a divorce. To ensure a fair split, make sure that you record all your business capital. Your business and personal expenses need to remain separate. Try to pay yourself well within the market standard or your former spouse could try to split a higher income than you receive.