3 ways to protect your business during a divorce

3 ways to protect your business during a divorce

On Behalf of | Jun 17, 2022 | Divorce |

Divorce can put a serious strain on your mental and emotional health, especially if the relationship with your spouse becomes particularly aggressive. What might concern you the most, however, is how you will preserve your business when it comes time to divide assets in your divorce.

Your spouse might have a significant claim to parts of your business if it is a marital asset, if your spouse actively participates in the business or if you have financial obligations to your spouse which might eat into your business as a financial asset. If you wish to protect your business from a harmful division in your divorce, there are certain actions you can take.

1. Get an accurate business valuation

One of your highest priorities in the face of a divorce is to seek a professional business valuation. Knowing the exact value of your business can give you a leg up in any future negotiations regarding asset division.

2. Sign a written agreement

If your business is not under the agreement of a prenuptial agreement, you can suggest a postnuptial to your spouse. While it may require some compromise, your soon-to-be ex-spouse might be willing to guarantee your ownership of the business in writing.

3. Distance your spouse from the business

When a divorce becomes imminent, one thing you can do is remove your spouse from the business. The less involvement a person has in the success of a company, the less of a claim they will have when it comes to asset division in a divorce.

In a worst-case scenario, business owners face the possibility of selling their enterprise entirely during a divorce case. Taking steps to protect your business can help ensure your livelihood long after a marital split.