Guarding Your Business Against Your Divorce

 Posted on October 13, 2018 in Divorce and Finances

Your efforts to protect your business from a possible divorce should have started at the beginning of your marriage. Keeping your business finances separate from your personal finances prevents your spouse from claiming ownership of your business. You can also create a premarital agreement that gives you complete control of your business in case of a divorce. Without these protective measures, your business is a marital property that you must account for in the division of property. You can maintain control of your business after your divorce, but it may require some sacrifices. Here are four steps to protect your business during your divorce:

1. Separate Business from Marriage: Your business may already be a marital property if you invested marital assets into it. Moving forward, you should create a wall between your business and personal finances. Have separate accounts for business and personal expenses and do not transfer money between them. Limit your use of marital properties as part of your work. You should have separate business and personal finance records.
2. Ease Your Spouse Out of the Business: Your spouse should no longer be involved in your business, whether as an owner or an employee. You can offer to buy his or her ownership interest in your business. You can fire your spouse as an employee but should understand the consequences of this action. By cutting off your spouse’s source of income, he or she will be more dependent on you following the divorce. You can instead lessen your spouse’s role in your business and encourage him or her to seek new employment.
3. Assess Your Business: You need an accurate value for your business to ensure a fair division of property. Overvaluing your business means you will give up too much in order to keep it during the division of property. You must assess both the current and future value of your business. You can be conservative in projecting your business’s growth and the economic outlook for your industry.
4. Identify Bargaining Chips: You will need to give up other valuable marital properties in order to keep complete ownership of your business. Privately decide which properties you are willing to sacrifice but do not lose leverage by letting your spouse know the properties you think are expendable. Your marital home may be your most valuable bargaining chip.

Your Business as a Marital Property

By protecting your business, you are also protecting your source of income and something you have invested great time and energy into. A Kane County divorce attorney at Goostree Law Group can give you strategies for keeping your business during a divorce. Schedule a free consultation by calling 630-584-4800.

Source:

https://www.forbes.com/sites/jefflanders/2018/10/02/women-divorce-proof-your-business-now/#950bcba3bd55