If you’re a business owner, especially one of a small business, that company is probably your most important fiscal and personal asset. Owning a business takes up most of your time and investments. That’s why in the event of business owners getting a divorce, you want this asset to be protected.
Any married person never plans on getting divorced, but sadly these things happen pretty often.
Business Owners and Divorce
Around half of marriages in the United States end in divorce.
Now those are some hefty odds. If you’re a business owner, getting divorced threatens all assets. Especially your biggest ones. If your business is included in the divorce settlement, it can affect many things.
At Ruesch and Reeve Law, we’re ready to help you navigate the protection of your business during divorce.
Even though divorce isn’t uncommon, a lot of small business owners aren’t equipped, or educated on how to deal with protecting their business during a divorce.
Learning the ways to save your business and other business related assets, even if you’re not getting a divorce, is in your best interest.
With available protection plans to set in place before, or even after marriage. At Ruesch and Reeve Law we want to help you take the precautionary steps to protect business owners during possible divorce.
Pre and Post Nuptials
Ideally, protecting your assets should be initiated before you even get married. Especially as a business owner, you have a lot to lose if a marriage leads to divorce.
A lot of people are uncomfortable with, or have the wrong ideals about prenuptials. Just think of it as a safety net in place for your business during a divorce. It doesn’t have everything to do with trust or faith in a lasting marriage.
Sometimes things just don’t work out the way people plan them to. That includes separating after marriage. Not ideal, but it does happen. You as a business owner should be prepared for if and when it does. Especially if your spouse is in on the business with you, things become even more complex.
So, it will be worth it in the long run to create a prenuptial contract. If things do work out and you don’t find yourself fighting a divorce, that’s great and it’ll still be there in the background. Completely harmless!
Having this agreement in place could drastically save your business and other assets. Don’t put off protecting your business during divorce. You’ve most likely put your all into your business. Have the same mindset when it comes to protecting it in case of divorce.
The same thought process should apply even if you’re already married. Maybe you’re thinking, “wow, I should have created a prenuptial contract to protect my business”. The good news is, it’s never too late!
If you’re a business owner who is already married, but are now realizing you’d like something in place to protect your business during a divorce, that’s where a postnuptial comes in.
As you go through life, the things in it evolve. Income may increase, assets change, businesses grow. It’s never an easy conversation to have, but always worth it in the long run. Some other great reasons to consider drafting a marital nuptial document may include:
- Protecting your pre-marital assets from becoming split, or taken in divorce.
- Preventing you from being liable for your spouse’s debt after divorce.
- Allowing your future income from being taken after divorce.
On top of these, come many logical reasons to take precautions as a business owner when it comes to marriage and divorce. Protect what is yours!
Separate vs Marital Property
When it comes to being a business owner going through divorce, it’s important to understand some specific terms. Starting with separate and marital property. Depending on which state you live in, things will vary.
Separate property can be defined as things that belonged to the spouse before marriage. Inheritance, retirement, etc. Where property separation gets tricky is after marriage.
Even if you were the business owner before your marriage, that property can easily shift to marital property if you don’t take action to protect it.
You have to be aware of the possible effects of mixing your property during marriage. This could apply to things such as:
- Receiving income on a shared bank account.
- Titling, or cosigning something in a spouse’s name.
- Involving them in your business.
The effects could quickly transfer any of your previously separate property to now, marital property. That includes any increase in business after marriage. Keeping your business and it’s income vulnerable in the event of a divorce.
Know Your Rights
Where you live can have a lot to do with divorce settlements. Different jurisdictions and judges will all determine the outcome of your assets. As a business owner, this can be a scary process.
Fully knowing and understanding which assets you have, what’s protected and how your business will be affected will save a lot of time and money.
The difficult process of divorce can be extra tough on business owners. Not only are things at stake, but it could potentially affect their personal well being and that of their business. Don’t get caught up in lengthy court battles. Have a plan set in place!
All but 9 states base divorce settlements on equitable distribution. This means the judge has a lot of say in your assets and where they go. Including your own business if not protected.
Considering a lot of factors, the judge will eventually make a decision. Some things they may take into account for a settlement include:
- Each spouse’s financial ability to support oneself after divorce.
- The length of the marriage itself.
- Age, health, education, etc.
Private divorce settlement is possible. There are legal resources for being a business owner during divorce.
If you are a business owner and have any questions about protecting your business during divorce, or just for the latest updates in your state, you should contact a local attorney for legal help.
Ruesch & Reeve, PLLC is a general practice law firm located in Southern Utah. We provide comprehensive services for individuals or corporate clients with legal needs!
With multiple experienced attorneys on hand, we’re here to assist business owners in the hard times of divorce. Contact us today and schedule a consultation!