If you and your former partner someday make the decision to part ways, you will have to take steps to separate your lives from one another’s. This involves dividing up assets and debts, and many people also have business interests to protect during their divorces.
Like many married business owners, you may have had your spouse take on at least some sort of role in your company. If so, you may need to take steps to ensure that he or she receives a fair distribution in the divorce. You can take act now to protect your business interests in the event of a divorce.
Have a contract in place
Taking steps to protect your interests ahead of time may help you avoid costly conflicts when you split up. Consider a prenuptial or postnuptial agreement that dictates how you plan to value or divide the business if you part ways.
Will one spouse have the opportunity to buy out the other? Are profits the business generates after marriage shared between you? These are the types of matters you might want to address in a formal contract before or during your marriage.
Take other steps to separate your business
Rather than creating prenuptial or postnuptial contract, you may protect your business interests by making yourself the sole owner of your company. You may stipulate that your spouse is not to receive ownership of it in the event of a divorce. However, you may have to give up marital assets to balance out the division of property.
In order to avoid the commingling of assets, you should keep your business and personal expenses entirely separate. Mixing funds has the potential to lead to conflict down the line if your spouse begins questioning exactly what belongs to who.
Taking these precautions may help you avoid expensive and contentious conflicts during a divorce that could permanently damage your business and your financial well-being.