When you start a business, you believe it will be the source of financial support for you and your family for the foreseeable future. There’s a good chance you never thought divorce would become a reality.
If you have decided to file for divorce, protecting the business you have worked so hard to build is likely a top priority. Without a prenuptial agreement or other documentation to keep your business out of the divorce, though, this could be challenging.
While it can be a difficult situation, there are things you can do to help protect your business during a divorce:
Invest in a Professional Valuation
If you started the business or acquired it during your marriage, it is (likely) considered marital property. This is true regardless of who owns the company.
Invest in a business valuation to reduce the amount of your business’s value that is at risk in a divorce. It should factor in things like future salary obligations and depreciation of equipment.
Consider Alternative Dispute Resolution
The outcome is unpredictable if you go to court and allow a judge to handle the property division proceedings. Judges must consider many factors when making these decisions, which may risk your business.
If you want more control over the outcome of the property division process, then you should consider mediation or another alternative dispute resolution. In this, you and your spouse can decide on these matters, allowing you to negotiate with them to maintain ownership of the business.
Your Business and the Divorce Process
Divorce is rarely easy. You may have to give up other assets to maintain control of your business. You must be willing to negotiate with your spouse to achieve a desirable outcome. Knowing your legal rights will give you the best chance to maintain control of your business.
This article was originally published on Bartholomew & Wasznicky, LLP.