Business owners can take steps now to reduce the risk of losing control of their company in a divorce. Gecko Studio/Shutterstock
You probably put sweat and tears into your business, and thought of someone walking away with half of it may be devastating. Divorce has the potential to wreck even the best business plan. Even an amicable one could have consequences.
But your spouse may not be entitled to half your business. Many factors go into the distribution of assets during legal proceedings, including where you live. Here are some ways you can protect your business during a divorce.
How Courts Determine Ownership
There are several factors a court considers when determining what happens to a business during a divorce. According to Lauren Taylor Law, these can include when you founded the company, as well as:
- Business valuation
- Involvement of spouse in the business
- Prenuptial or postnuptial agreements
- Financial obligations to spouse
It’s important to maintain accurate financial records to protect your business. Keeping your business credit cards and bank accounts separate from your and your spouse’s personal bank accounts can also reduce the chance of a spouse claiming assets during a divorce.
Prepare for a Divorce
No one wants to think about divorce when planning a wedding. But if you own a company, planning is crucial to avoid negative consequences later down the road.
