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How to protect your business from a divorce

How to protect your business from a divorce

On Behalf of | Feb 19, 2022 | Divorce |

It takes blood, sweat, and tears to create a business. Unfortunately, your personal life can threaten your accomplishment.

When a husband and wife divorce, a judge divides community property. Your business could be part of this equation. Without protection, you might wind up in a partnership with your ex-spouse. Put your business in a trust, so it is no longer a marital asset. Create separate business and personal accounts. Beyond these steps, have your spouse sign a document voiding any claim.

Prenuptial agreements

Many are reluctant to present paperwork before a wedding. That said, doing so could save your business, although there are no guarantees. Prenuptial agreements include all types of legal provisions. One can be that your business is exempt from divorce proceedings. For the order to have weight, the signature must be valid and free of coercion. Impropriety could void the document.

Postnuptial agreements

These contracts are much like prenuptial agreements. The main difference is they happen after a wedding. As such, they are subject to intense analysis by courts. Despite being weaker than prenuptial agreements, having one is better than nothing.

Buy-sell agreements

Another option is a buy-sell agreement. It allows you to maintain control of your enterprise in the event of death as well as divorce. A professional familiar with taxes or contracts can draft one on your behalf.

The dissolution of your relationship does not have to damage what you have built. Take measures to make sure there is no interference resulting from a divorce.