How to “Divorce-Proof” Your Business
When it comes to businesses started during your marriage, you may not realize that, if you do not properly protect that business, it could be split with your ex in the event of divorce. Some individuals even find themselves having to give up their own shares of a company they started – allowing their ex to buy them out as part of their settlement agreement – which can bring on feelings of tremendous despair and loss. Not only could you lose your business, but you would also have to split any growth in the value of that business that occurred during the marriage.
However, it is also important to realize that this does not have to happen, as there are ways to “divorce-proof” your business – as long as you plan ahead. First and foremost, keep in mind that the best time to do this is before you get married, and if you are already married, before you can even contemplate getting a divorce.
Pre- and Postnuptial Agreements
A prenuptial agreement is one excellent instrument that can be used to do this. The written legal agreement can set anything aside—including a business started during a marriage—as separate property. Of course, any prenup agreement must be executed in accordance with the law, which means that full financial disclosure must be involved, and it must be executed before witnesses, without coercion, and where each party has their own legal representation. It also cannot be unconscionable (i.e. so unfair as to violate public policy). If it is too late for a prenuptial, a postnuptial agreement can also be entered into after marriage.
Once your fiancé signs the prenup, you will want to continue to work with your attorney to ensure that your business income is kept separate and not intermingled with marital assets. Your attorney will be able to help you ensure that everything is done by the book, so to speak.
Transferring Your Business into a Trust
Another option is to transfer your business into a trust, such as a Domestic or Foreign Asset Protection Trust. In this case, you will want to ensure that you work with an attorney who understands the nuances of business transfer like this. One of the benefits of this option is that your fiancé does not have to approve or sign anything first.
Contact Our Florida Business & Divorce Attorneys
Whether you are considering getting married or divorced, you want to make sure that you consult with an experienced family law attorney who comprehends all of your options when it comes to property division so that you are protected at every step. In the same way you obtain auto or homeowners insurance to protect yourself against loss, you should divorce-proof your business.
Contact our Florida divorce attorneys at HD Law Partners today to provide you with the guidance you need so that your business stays safe. Our attorneys are well versed in business, family, and divorce law, and the property division issues that come along with them.